CDC Group, a UK-based government agency, recently committed USD 50 million to Pragati India Fund, a venture fund targeting investment opportunities in India. This fund is unique in its investment strategy as it is one of the first to specifically focus on venture capital opportunities in India’s eight poorest states. These states, predominantly located in North and East India, have received low levels of investment in the past, due to both a high proportion of the workforce being unskilled and poor infrastructure. Pragati India Fund will invest across a wide range of industries, including healthcare and education. With a target of USD 100 million, CDC Group has already committed half of the capital that the fund looks to raise.
CDC Group is an active investor in private equity and invests exclusively in emerging markets such as India. In May 2011, following the announcement of its new business plan, the government agency now targets funds that fit with its overall strategy of investing in emerging markets, with a specific focus on low-income countries in sub-Saharan Africa and South Asia. Within these countries it is interested in industries that can further economic growth, including manufacturing, financial services and technology.
Preqin’s Investor Intelligence database, which tracks over 4,000 investors in private equity funds, currently shows that 25% of LPs have stated a preference for or have previously invested in private equity funds focused on emerging markets; 15% of LPs have previously made a commitment to private equity funds with exposure to India.