Paragon Partners, a $200 million private equity fund floated by Siddharth Parekh to provide growth capital for mid-market deals in India, has raised $50 million (Rs 340 crore) in commitments to mark the first close of the fund, according to a press release.
Siddharth Parekh, the younger son of Housing Development Finance Corp (HDFC) chairman Deepak Parekh, had floated the fund Paragon Partners Growth Fund I (PPGF-I) last year in partnership with Sumeet Nindrajog.
The firm also formally announced its first investment in Mumbai-based privately held property construction firm Capacite Infraprojects Ltd. It has invested $10 million in Capacite as growth capital, it said on Wednesday.
VCCircle had first reported that Paragon Partners is to invest Rs 63 crore ($10 million then) in Capacite. It had sealed the deal investing through compulsorily convertible preference shares, to be used for long-term working capital requirement. Paragon Partners had not commented on the previous story.
Meanwhile, Paragon Partners said it got commitment from domestic institutional investment houses such as IIFL (formerly India Infoline), Edelweiss Group and Infina Finance Pvt Ltd (an associate of Kotak Mahindra Bank Ltd). The fund also received a significant commitment from the Fairfax group based in Canada. Fairfax is also an investor in IIFL.
PPGF-I is registered as a Category II fund under SEBI's AIF norms that straddles sector agnostic and real estate focused private equity style funds. The focus of the fund will be five key sectors—consumer discretionary, financial services, infrastructure services, industrial and healthcare services.
The firm has an advanced pipeline of investment opportunities across these sectors and plans to invest in 10-15 mid-market companies in India, with an average deal size of $10-20 million, it said.
Paragon Partners has recruited a team comprising six investment and operating professionals and a CFO, it said.
Besides, its advisory board includes Deepak Parekh (chairman, HDFC Ltd), Harsh Mariwala (chairman, Marico Ltd and founder member), Sunil Mehta, (chairman, SPM Capital Advisors Pvt Ltd) and Jeff Serota (former senior partner at Ares Private Equity), amongst others.
“Paragon Partners’ unique investment philosophy supported by industry veterans will further enable us in strengthening our business footprint and rapidly scaling up in our growth ambitions," Rohit Katyal, director of its first investee firm Capacite, said.
Capacite is engaged in the construction of buildings (including super high rise structures) and factories, for large real estate developers, corporates and institutions.
Siddharth Parekh, an alumnus of Columbia Business School and University of Pennsylvania, has seven years of private equity experience.
Before founding Paragon Partners, he worked with the UK-based emerging markets PE fund Actis for around seven years at the Mumbai office. Prior to that, he was with International Finance Corporation as an investment analyst, and also worked as an associate with The Boston Consulting Group.
Deepak Parekh's elder son, Aditya, separately runs another PE firm Faering Capital.