Tano Capital has raised $111.3 million for the final close of Tano India Private Equity Fund II, according to a statement from the PE firm. Tano Capital, an Asia-focused alternative asset management firm, was targeting $150 million for the second India offering.
Tano India Private Equity Fund II is the successor fund to the $100 million Tano India Private Equity Fund I, a 2006 vintage fund which has made direct investments in 10 India-based portfolio companies and realised several successful exits.
The first close of the second fund, which would focus on mid-market companies in India, was made in November 2010 at $54 million and second close at $97 million in October 2011. The fund, raised only from offshore investors, has seen commitments from family offices, institutions and fund of funds, among others.
Tano Capital LLC was founded in 2004 by Charles E. Johnson, former co-president of Franklin Templeton Investments and CEO of Templeton Worldwide, Inc. The fund in the country is advised by Tano India Advisors, led by Hetal Gandhi and Carlton Pereira.
Tano Capital is looking to invest between $12 million and $20 million from the new fund across eight companies or so. The private equity firm, which has made several bets in manufacturing, engineering and healthcare space, will continue to look for invest opportunities in these areas, besides targeting others. It will also focus on sectors like infrastructure ancillaries, consumer discretionary and financial services.
“We are optimistic about the current market environment. There is a lot of uncertainty on the macro front, especially in Europe and China, and this is creating a solid pipeline of new opportunities for us to review. Globally, valuations have been coming down along with P/E ratios, which is certainly our preferred type of climate to source new investments,” said Johnson, founder and managing director of Tano Capital.
“We have been through several cycles already in this increasingly volatile macro environment since our launch in 2004, and this one appears to us to be no different. There is a lot of pessimism and uncertainty now, which we have also seen in past cycles, and that generally leads into attractive current deal opportunities,” said Hetal Gandhi, managing director and co-founder of Tano India Advisors.
“We have already realised two exits in our Fund I portfolio with attractive returns, and expect to achieve at least a couple more in the current year. Our consistent, team-oriented, demonstrated investment process has enabled us to achieve this excellent milestone in a most difficult fundraising environment,” said Carlton Pereira, managing director and co-founder of Tano India Advisors.
Last year, Tano Capital’s portfolio companies SSIPL Retail and PME Power Solutions (India) filed for IPO. Tano’s other portfolio firms include Virgo Engineers, ICOMM Tele, Anil Printers and ABG Motors.
Tano’s latest investment came in March last year when it put in Rs 24.4 crore or $5.4 million to acquire 14.7 per cent stake in oral care products manufacturer JHS Svendgaard Laboratories Ltd.
Tano Capital also made two exits – one through a strategic sale and another via open market sale. Last year, it had exited Shilpa Medicare Ltd, a listed manufacturer and exporter of active pharmaceutical ingredients, making returns of 4.5x. Shilpa later raised private equity funding from Baring Private Equity Partners India.
Tano also sold its minority stake in privately held Ravin Cables through a strategic M&A sale to Italy’s Prysmian. Milan-based Prysmian acquired 51 per cent controlling stake in Ravin Cables for Rs 200 crore in early 2010.