SME buyout firm TIW nears final close of maiden fund; plans next outing
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SME buyout firm TIW Private Equity is close to marking the final close of its debut fund and will raise another fund worth $100 million (Rs 714 crore at current exchange rate), said The Hindu BusinessLine.

TIW’s debut fund, with target corpus of Rs 500 crore, has already raised around Rs 450 crore in several rounds, according to the report.

An email query to TIW seeking more information on the new vehicle didn’t get any response till the time of publishing this report.

TIW is sector-agnostic and makes equity and equity-linked investments typically in India-based sectors having positive Return on Equity (RoE).

TIW’s typical investment ticket size lies between $4 million and $8 million for a portfolio firm. Till date, it has made four investments, which include an FMCG (fast-moving consumer good) firm and a testing lab.

“The SME segment continues to generate a high level of employment but some SMEs end up with debt and succession issues,” said Ralhan, managing partner and investment chief of TIW, in the report. Ralhan was an executive at Baring Private Equity Partners India.

He added, “We prefer investing with first-generation entrepreneurs who have higher passion and energy to scale up organisations and drive exponential growth. We like taking minimal market risk and prefer execution risk in strong macroeconomic/sectoral themes.”

He told the publication that the PE firm, which brings in fresh money to turn around companies, has till now funded about eight firms, including an FMCG company and a testing lab.

Ralhan said TIW, unlike most venture funds, will not take on adoption risk: “We are keen on investing in old-economy companies or those which are past adoption risk and that is why we are different from the venture fund.”

The PE firm’s portfolio companies include Kaunis Marketing Services, which works with international beauty brands; Plovio Value Chain Solutions, which helps removes intermediaries from the supply chain.

TIW is among a host of private equity firms raising funds at a time when there is a capital crunch in the mid-market segment.

In March last year, SeaLink Capital Partners, the private equity firm founded by former KKR executive Heramb R Hajarnavis, announced the final close of its debut fund.

Mid-market PE firm Lighthouse Funds also announced an interim close for its new fund. Amicus Capital made an interim close of its maiden fund in late 2016.

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