Even as fundraising continues to remain tough, the top funds raised in 2013 contradict some of the perceptions regarding Indian private equity. While it is believed that raising money for captive funds is tough, three of the top five funds on the list are promoted by large business houses and financial services firms. Also as sectors like real estate and infrastructure have remained out of favour of the broader markets, three funds mentioned in the list focus on realty assets.
Here is a look at the top five funds raised in 2013:
IDFC’s India Infrastructure Fund II: $644 million
The alternatives arm of IDFC Ltd raised $644 million for the first close of its second infrastructure fund, which is looking to raise $1billion. IDFC Alternatives Ltd has raised $64 million from anchor investor IDFC and another $580 million from offshore limited partners (LPs) for India Infrastructure Fund II (IIF2) in September.
This was the largest first close for an India-dedicated fund in nearly five years and largest capital raised in over two years. Before this, Macquarie SBI Infrastructure Fund made first close of over $1 billion in 2010 and final close of $1.17 billion in March 2011.
IIF2 is the successor to IDFC’s debut infrastructure fund (IIF1), which closed in June 2009 with a fund size of $927 million from Indian and international institutional investors.
The fund comes at a time when fundraising for India-dedicated pools has been tough and infrastructure has fallen out of favour with private equity investors.
Tata Opportunities Fund: $600 million
Tata Capital reached the final close of Tata Opportunities Fund LP with commitments of $600 million – one of the largest fundraising by
an India-focused vehicle in recent years. The fund had made its first close with $450 million in commitments in April 2011. Tata Opportunities Fund has a mandate to deploy majority of its capital in ‘Tata Group-related situations’.
The fund has closed two deals, first being Roots Corporation, a subsidiary of the group’s hospitality arm Indian Hotels Company, which runs the budget hotel chain Ginger. This year, the fund picked up 5 per cent stake for Rs 250 crore in direct to home (DTH) television service operator Tata Sky.
It has three other deals in the pipeline, including buyout of Actis’ stake in joint venture with Tata Realty & Infrastructure (TRIL) to build road projects across India.
The fund roped in Gautham Radhakrishnan, a director at emerging markets private equity major Actis, as a partner this year.
Kedaara Capital: $540 million
Kedaara Capital Advisors Ltd, co-founded by private equity veteran Manish Kejriwal, made the final close of its offshore fund at $540 million. The fund exceeded its original target of $500 million and is
topping it with a parallel domestic pool, which could raise up to $50 million. This is one of the largest debut fundraises by an independent private equity firm out of India, exceeding Ajay Relan’s CX Partners ($515 million) and Renuka Ramnath’s Multiples ($450 million).
What perhaps might have given it the edge was the tie-up with private equity major CD&R (Clayton, Dubilier & Rice).
Kedaara has essentially identified two investment opportunities for itself. On the control side – it will focus on ‘carve-outs’ such as corporate divestitures of under-managed or non-core business units
locked within family conglomerates. The second leg of its investment strategy is to invest behind emerging leaders competing in select sectors reaching critical mass such as consumer, financial and business services, pharmaceuticals, healthcare and agriculture sectors.
ICICI Venture’s Infra Fund: $270 million
ICICI Venture Funds Management Company, an arm of India’s largest private sector lender ICICI Bank, raised $270 million for the first close of its debut infrastructure fund. The fund is looking to raise $500 million to $700 million. It is planning to focus on mature assets rather than greenfield projects.
According to reports, the funds investors include Temasek, Life Insurance Corporation and General Insurance Corporation. ICICI Venture had roped in Manikkan Sangameswaran, former managing director and head of infrastructure at Babcock & Brown India, to co-head the infrastructure fund. The firm had also recruited Mohit Batra and Partha Dey, who worked in infrastructure financing business at ICICI Bank.
Everstone Capital’s IndoSpace Logistics Fund II: $250 million
Everstone Capital’s IndoSpace Logistics Fund II has raised $250 million this year to build industrial warehouses across India. The fund, a joint venture with US based Realterm Global, is successor to a $240 million pool raised in 2009. It is targeting $350 million.
With 11 projects under development across 5 cities and a total target built-up area of 15 million square feet, IndoSpace is one of the largest developer of industrial real estate in India. Its clients include DHL, P&G, Levi’s and L’Oreal.
(Edited by Joby Puthuparampil Johnson)