From 2011 to present, Preqin tracked 21 private equity funds (excluding real estate and infrastructure) raised by India-based fund managers that reached final close. These managers garnered an aggregate $3.4bn from investors. Of these funds, the largest vehicle is Everstone Capital Partners II, the successor fund of Indivision India Partners. Everstone Capital Partners II, managed by Everstone Capital, successfully closed at $580mn and will invest wholly in India and targets all industries, including domestic consumption and infrastructure ancillaries sectors. The fund commitments came solely from offshore investors.
At present there are 47 private equity funds managed by India-based GPS that are currently on the road, excluding real estate and infrastructure vehicles. These funds are seeking $8.8bn in aggregate capital. More than half of this capital (60%) will be invested in growth stage companies. The largest solely India-focused growth fund that is currently fundraising is EW India Special Assets Fund, a vehicle that seeks to leverage on an asset reconstruction company (ARC) for investments in India. The sector-agnostic fund will be managed by Edelweiss Alternative Asset Advisors, the subsidiary of Edelweiss Financial Services. EW India Special Assets Fund raises capital from non-Indian investors, including those based in US, Europe and Asia. A further 17% of the total capital gathered from private equity funds raised by India-based GPs will be targeted at venture stage companies, with the remainder allocated to buyout and special situation opportunities.
In terms of geographic breakdown, a vast 87% of the capital raised by India-based GPs will be invested in India, while another 11% of the total fund capital has a global focus that also includes India. The remainder is scattered across various countries such as the US, Canada and Asia, including the ASEAN region.
With a target size of $1bn, Tata Opportunities Fund is the largest offshore-focused fund on the road being raised by an India-based GP; however the specific team for this vehicle is based in Singapore. The fund has a significant focus on domestic opportunities, but may also invest in global markets, and will make equity investments principally in, and alongside, Tata entities. The fund will invest between $50mn and $200mn in each portfolio company and seeks commitments from both India-based and non-Indian investors.
It is interesting to note that a number of large funds raised by India-based GPs seek capital from offshore-based investors. As international investors warm up to the Indian market, there is a possibility of an increase in these investors seeking relationships with Indian GPs going forward.