Private equity firm Olympus Capital has successfully completed raising Asia Environmental Partners LP at $250 million. The fund, which is mainly focused on India and China, will make investments in renewable energy and environmental services companies. Asia Environmental
Partners has received commitments from across the world including $25 million from International Finance Corporation (IFC), part of World Bank.
"We will deploy a large portion of this capital in India," said Gaurav Malik, MD and India head of Olympus. The first sector focused fund from Olympus has dedicated investment teams in Hong Kong and New Delhi.
It's looking at deals in areas like clean energy, clean technologies, waste management, water quality treatment infrastructure, and pollution control, among others. Asia Environmental Partners made its first investment in India last year by putting $35 million in Orient Green Power Ltd, a renewable energy firm. "We would look to do 3-4 more deals from this fund in India," added Malik.
Right now the firm is focusing more on energy efficiency and water management, both on the equipment and the services side, said Malik. It's also looking at municipal solid waste management, which is a big opportunity in an underdeveloped space.
Olympus would look at opportunities ranging from $20 million to $100 million. For larger deals it could look at co-investing with its flagship Olympus Capital Asia III, which raised $750 million June 2008. Olympus has invested only around 25% of the corpus across both these funds and is sitting on substantial dry powder.
There is an increasing interest among investors in Asia's environmental sector, especially in India and China. France-based Aloe Private Equity, which manages $233 million, has raised a fund focusing on India and China. Global Environment Fund (GEF) is also raising $200 million South Asia Clean Energy Fund with Yes Bank.
"The fact that we have been able to raise a fund in this environment speaks both of our track record and the fact that LPs are convinced about this opportunity," said Malik. Olympus has a six-member team in India, out of which two look at opportunities for Asia Environmental Fund. The Asia focused firm's other India investments include Raman Roy's Quattro BPO and crane hiring company Sanghvi Movers. It's now also looking at deals in areas like outsourcing, natural resources and food & agriculture.