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 in PEHub.
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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 thisâ€.
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If this happens, Sequoia will be closer to the Blackstone model of a core fund strategy rather than Carlyle’s.
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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.
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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.
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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.
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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.
