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India Rizing Fund, a first of its kind venture fund for small and medium enterprises (SMEs) making defence equipment, has received the approval from FIPB and the government to kick off its plans to raise Rs 550 crore with subscriptions from foreign investors. The Mumbai-based fund, which is promoted by the former director and India head (specialist finance) at ANZ Investment Bank, Rajesh Narayan, plans to raise $100 million (Rs 400 crore) initially, keeping provisions to scale up investments by $200 million (Rs 800 crore). It has a 10-year duration, with an option to increase it by four more years. “Our first closing is likely to be in October and the final closing by December this year,” Mr Narayan told ET. More such funds may be created in the future for investment into the Indian defence production sector. The fund is close to tying up with about six foreign investors in their bid to raise money. […]
Dutch financial services conglomerate ING Groep NV, among the top 20 companies in the world based on market capital, is looking to buy an established private equity, or PE, fund house in India, according to a company executive familiar with the development. New Delhi-based Avigo Capital Partners, a PE fund manger with a focus on small and medium enterprises (SMEs), is a potential candidate, this person said, asking not to be named as the target is not finalized yet. “We are looking to buy out a PE fund house or acquire strategic equity stake in one of them,” the ING executive said. The deal is being explored from ING’s Hong Kong office at One International Finance Centre on Harbour View Street, he added. But, Vivek Subramanian, a founding partner at Avigo, said the firm is not in talks tosellout the business. Small funds will not survive long in the PE business, which is “essentially a large capital play”, said Jon Schahinger, who heads ING’s PE business in Asia from its office in Australia. “As the market grows, small funds perish if they aren’t taken over by larger funds.” […]
The public sector banking major State Bank of India (SBI) is now planning to cater to the fund requirements of the small and medium enterprises (SME) sector, which often faces unfair treatment from the banking sector when it comes to lending, by setting up an exclusive fund. The biggest bank in the country has decided to set up a private equity fund to cater to the capital requirements of the SME sector. “We will not only lend, but participate in the equity of SMEs. We will even hand-hold them initially and help with various issues including tapping the capital markets,” said the SBI chairman O P Bhatt. He said the fund would be set up during the current calendar year with a first tranche of about Rs 500 crore. Fund size would be increased as per need. The bank would hold 20% equity in the fund and is talks with potential partners. In order to perform professionally and independently, the fund would not be managed by the external partners. […]
D E Shaw, a global private equity firm with $36 billion in assets, is understood to be planning around $200 million investment in the Indian education sector by taking up strategic positions in companies offering e-learning, distant learning, vocational training and the like. The PE major is upbeat on the sector following the ministry of education's estimate that the country needs to build close too 200,000 new K-12 (kindergarten to senior secondary) schools. According to industry sources, the infrastructure must be set up within five years to provide education for predicted growth in student numbers and also the over 100 million children who are out of school. The government has called on the private sector to help fill this demand-supply gap. “However, one of the principal supply side constraints for private schools is the access of educational infrastructure required for a new school and companies such as Educomp intends to target this gap,” an industry source said. The spokesperson for D E Shaw could not be reached for comments. D E Shaw is expected to leverage one of its portfolio firms, Excelsoft, as a vehicle for acquisitions in this sector in addition to making direct PE investments. […]
Infrastructure Development Finance Co plans to list a $1.25 billion infrastructure fund, a source said on Tuesday, underlining the country's need for cash to modernise its power and transport. A source with direct knowledge of the fund, which would be India's first listed infrastructure fund, said it has raised over $500 million so far. He said the fund will likely list in India, but declined to give a timeline. “The fund will buy assets such as ports, roads, airports and oil and gas pipelines that can generate steady, predictable returns for investors,” said the source, who declined to be identified because the fund raising was still ongoing. Investors are increasingly looking for firms with stable earnings prospects as they seek refuge from recent turmoil in financial markets. […]
Clearstone Venture Advisors, a global venture capital fund with over $650 million of committed capital for investment globally, is set to invest in a company in the mobile value-added services (VAS) space in India. The size of the investment will be less than $10 million. The company expects to close the deal in the next four to five months. “Since the mobile touches millions of people in India, it is a great horizontal delivery vehicle — whether for transaction processing, electronics payments or mobile advertising. We do believe that everyone with a mobile phone is part of a digital network. This means they are ripe for some kind of network model or services model over the phone. So we are looking at the entire VAS space for breakthrough opportunities,” said Rahul Khanna, director, Clearstone Venture Advisors. Since starting operations in India in 2006, Clearstone has invested in four Indian companies with a committed capital of about $20 million. These are being funded from the company's third fund which is $210 million in size. […]
Korean financial services giant Mirae Asset Financial Group is planning to enter the investment banking, wealth management and private equity segments in the country. Mirae Asset Financial Group chairman Hyeon-Joo Park said that the company recently launched its asset management business in India. “We are now preparing to launch our securities business in the country,” Park said, adding that Mirae was not eyeing the brokerage space. He refused to put a figure to the proposed investment into India. The group has been exploring an inorganic entry into India through an acquisition. “But we have not been able to find a suitable company,” said Park. Real estate too was on Mirae’s radar but regulations in India are dissuading the Korean company. “If the government of India softened the regulations, we would like to invest in real estate,” Park added. […]
Trikona Capital Ltd., the leading fund management firm for institutional investment in Indian real estate and infrastructure, announced it has extended its relationship with SachsenFonds Holdings GmbH, a German fund manager with $7.5 billion under management, in a $150 million deal that includes minority stakes of current Trikona assets and investments in new projects. Trikona's divestments earned a return on capital of 115%. Trikona laid the foundation for this partnership last December when it sold assets in the portfolio of Trikona's London Stock Exchange-listed fund Trikona Trinity Capital PLC (LSE: TRC) to SachsenFonds for nearly $65 million, a return of 108% for Trikona. As part of the $150 million deal, Sachsen will join Trikona as co-investors in a $40 million investment in Mumbai to refurbish four acres of middle-class housing and build high-end luxury homes as part of Trikona's urban rejuvenation platform. Sachsen will contribute 55% of the investment cost. […]
KSK Emerging India Energy Fund, which will make investments in Indian power and energy companies, plans to raise up to 101 million pounds through its listing on the Alternative Investment Market next week. The newly incorporated firm in Guernsey, Channel Islands plans to list its shares on AIM, which is part of the London Stock Exchange, on June 9. It would seek registration in Guernsey as a closed ended investment entity. The objective of the company is to generate long-term capital growth for its shareholders through diversified exposure to an actively managed portfolio of investments into companies engaged in the Indian power and energy sector value chain. The company would target predominantly unlisted companies with strong growth prospects and experienced management teams that require capital for growth, KSK Emerging India Energy Fund said in a regulatory filing, which is mandatory prior to the listing. It would mainly target investment in growth capital companies such as those engaged in manufacture of equipment, providers of engineering, design and construction services. […]
The lure of infrastructure finance opportunities is prompting more players to set up dedicated funds. The Kotak Mahindra Group is now looking at launching a $1-billion infrastructure fund, for which it could tie up with a global player. It is also looking at options of setting up a hedge fund type structure from one of its overseas arms to invest in India. The group had last year moved its private equity and real estate funds under Kotak Investment Advisors (KIAL). This alternate assets division already has assets under management of nearly $1.6 billion, which would increase to around $2.5-3 billion in a year’s time if the infrastructure fund gets launched. It is also in the process of raising funds from overseas markets for its private equity and real estate funds. KIAL, which came into effect from October 1, 2007, had posted a net profit of Rs 13.5 crore for the year ended March 2008. […]
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