Tata Opportunities Fund Reaches 2nd Close At $550M; Targets $1B Corpus

05 October, 2011

Tata Opportunities Fund LP, a sector-agnostic private equity fund floated by Tata Capital (the financial services arm of the $83.6 billion Tata Group) has achieved the second closing for the fund at $550 million. The fund had commitments of about $450 million at the first closing, the company spokesperson said in an e-mail response.

The fund had achieved its first closing earlier this year within five months of its launch and garnered subscriptions from global institutional investors.

The total corpus being targeted by Tata Opportunities Fund is around $1 billion. “The corpus depends on market conditions and investor appetite. Based on current indications, it seems that the final fund corpus can be around $1 billion,” the spokesperson added.

On whether the fund is planning more interim closes before the final close, the spokesperson said, “It is contingent on market conditions and business requirements. Also, it depends on negotiations with specific investors who are in discussions to enter the fund.”

The fund’s investors include global marquee institutions from North America and Asia who will not only participate as limited partners but will also co-invest directly into the portfolio companies.

Tata Opportunities Fund is a sector-agnostic fund, looking to invest into companies through a mix of growth and buy-out strategies. This fund under Tata Capital is led by Mukund Rajan who joined Tata Capital in June 2010. Other key professionals include Padmanabh (Paddy) Sinha, chief investment officer and senior partner, and Rajesh Singhal, partner for the fund.

Tata Capital, the financial services and asset management arm of Tata Sons, recently announced that it had raised $800 million for its private equity fund business and would be on track to raise $1 billion by 2012.

“The total corpus raised by Tata Capital has expanded since the last announcement, with commitments being received from various investor groups. Tata Capital is on track to cross the $1 billion mark,” the spokesperson added.

The company has five funds including Tata Opportunities Fund, Growth Fund, Innovation Fund, Healthcare Fund and Special Situations Fund. So far, the PE firm has invested $150 million across six investments, including two Tata Group companies. And it has recently roped in Capvent’s Joe Sovran to help the firm’s PE arm raise funds from global investors.

More than 50 funds with India focus or India as one of their focus economies are currently on road, trying to raise money. And it will be interesting to see how the LP community will digest these relationships. It is a challenging fund-raising environment right now, with a considerable decline in the appetite for Indian fund managers – largely driven by disappointing performances, team changes, ‘me-too’ funds, expensive entry valuations, investment overlaps with other GPs, generational issues and relationship fatigue.

 


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Tata Opportunities Fund Reaches 2nd Close At $550M; Targets $1B Corpus

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