Sequoia Capital may be looking at bunching together its different funds into a single vehicle.
At its next annual LP (limited partners) meeting in China, Sequoia may put in place a consolidation plan too, according to a report
What this means is that instead of separate funds focused on domains or geographies, Sequoia will have a single fund. When contacted, a spokesperson for Sequoia Capital India said, “we would not like to comment on this”.
If this happens, Sequoia will be closer to the Blackstone model of a core fund strategy rather than Carlyle’s.
While the move spells multiple benefits in terms of synergies between portfolio firms, the key concern would be the possibility of a stronger office sharing carry (PE manager’s share of profits made on investments) with a weaker one.
It remains to be seen whether the proposed consolidation will have a huge impact on Sequoia’s India investment plans and strategy. Sequoia Capital India announced the closing of its second Growth Equity fund at $725 million in August 2008. That took Sequoia Capital India’s total funds under management to a little under $1.8 billion. With the new fund, Sequoia said, it plans to increase the ticket size of its investments and do more late stage and PIPE deals.
Sequoia India, which was formed after merging Westbridge Capital Partners with Silicon Valley-based Sequoia in 2006, is one of the earliest and most active venture capital funds in India.
Post the merger, Sequoia raised its first growth fund of $400 million in 2006. The firm has nearly finished investing out of this fund. Its investments include Idea Cellular, Edelweiss Capital, brokerage startup Unicon Financial, and garment retailer Cotton County.
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