Tata Op­por­tu­ni­ties Fund to raise $600 mil­lion next year

The Pak Banker - - COMPANIES/BOSS -

Tata Op­por­tu­ni­ties Fund (TOF), the third-party pri­vate eq­uity fund ad­vised by Tata Cap­i­tal, is look­ing to raise a sec­ond fund next year of nearly $600 mil­lion, said a se­nior ex­ec­u­tive at the fund.

"We are see­ing a good deal pipeline and we will be able to de­ploy our ex­ist­ing fund by the end of this fi­nan­cial year af­ter which we will raise a suc­ces­sor fund of sim­i­lar size," said Pad­man­abh Sinha, man­ag­ing part­ner at TOF. Of the $600 mil­lion cor­pus in the present fund, $400 mil­lion has been in­vested across six deals. TOF also in­vested an undis- closed amount in taxi-hail­ing app Uber Tech­nolo­gies Inc. on 20 Au­gust. Ac­cord­ing to Reuters, the deal was worth $75-100 mil­lion.

From its maiden fund, TOF in­vested the bulk of its cap­i­tal in Tata group com­pa­nies. A sim­i­lar in­vest­ing man­date will be fol­lowed for the next fund, Sinha said. The fund will also have the op­tion of co-in­vest­ment by lim­ited part­ners in deals that are larger in size, Sinha added. Lim­ited part­ners are those who in­vest in a pri­vate eq­uity fund. In a co-in­vest­ment, lim­ited part­ners in­vest along­side the fund.

So far this year, TOF has made two in­vest­ments. Apart from the in­vest­ment in Uber, the fund in­vested Rs.335 crore in Hy­der­abad-based Tata Projects Ltd for an undis­closed stake in July this year. As part of this deal, the fund ac­quired a stake from four Tata com­pa­nies that had been in­vestors in Tata Projects since the com­pany was formed in 1979. Last year, it ac­quired a stake in Ben­galu­rubased real es­tate firm Shri­ram Prop­er­ties Pvt. Ltd for Rs.468 crore.

The fund's other in­vest­ments in­clude Ginger Ho­tels, Tata Sky DTH In­dia, Var­roc En­gi­neer­ing Pvt. Ltd and TVS Lo­gis­tics. "We will in­vest with a sim­i­lar strat­egy, and all our trans­ac­tions have been sourced on a pro­pri­etary ba­sis un­like other funds. We are part of the flag­ship fund and we have the abil­ity to source good deals," Sinha said. The fund typ­i­cally in­vests $50-200 mil­lion per trans­ac­tion and is ex­pect­ing an in­ter­nal rate of re­turn of over 20% from its in­vest­ments. TOF is among a hand­ful of funds that have started or are in­tend­ing to start rais­ing new funds.

Some of the other home-grown funds that are on the road to rais­ing cap­i­tal in­clude Renuka Ram­nath-led Mul­ti­ples Al­ter­nate In­vest­ment Man­age­ment Pvt. Ltd, which is about to close a $600 mil­lion fund-rais­ing round across an off­shore and a do­mes­tic fund. Oth­ers such as CX Part­ners, ChrysCap­i­tal and Aditya Birla Pri­vate Eq­uity are also look­ing to raise funds. "The fund-rais­ing en­vi­ron­ment is still tough. But there is lit­tle choice in terms of ge­og­ra­phy for the in­vest­ment dol­lars to go to. Europe con­tin­ues to be trou­bled. The China story, too, is very dented right now. So, rel­a­tively, In­dia is in a bet­ter po­si­tion and In­dian funds can play this to their ad­van­tage," said Kalpana Jain, se­nior di­rec­tor at Deloitte Touche Tohmatsu In­dia Pvt. Ltd. Also, one of the big­gest hitches that in­vestors had with in­vest­ing in In­dian funds was the lack of ex­its, she said. "If we see the re­cent trend in ex­its, that prob­lem has some­what eased and this should help In­dian funds with their fund-rais­ing ef­forts," Jain added.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.