International Finance Corporation and its asset management arm plan to invest a total of $45 million (Rs 290 crore) in India-dedicated private equity firm Lighthouse Funds LLC’s third mid-market fund.
IFC plans to invest up to $20 million and IFC Asset Management Company is considering a parallel investment of as much as $25 million, the World Bank arm said in a disclosure.
The PE firm is seeking to raise $200 million in capital commitments for its third fund, Lighthouse India Fund III Ltd.
The investment firm had raised $92.7 million in its first fund, India 2020 Ltd, in 2008 and about $138 million in its second fund, India 2020 Fund II Ltd, in 2013. IFC had backed the second fund, too.
The PE firm seeks to invest in lower mid-market companies in India spanning sectors such as consumer goods,personal care, lifestyle, food and beverage, agriculture, building materials, healthcare and financial services.
The US-based Lighthouse was set up in 2001 by Mukund Krishnaswamy, a former executive at Lehman Brothers’ private equity unit, and William Sean Sovak. It has been investing in India since 2006.
Lighthouse is among the many mid-market PE funds that are floating new funds. Ascent Capital is aiming to raise up to $400 million while Amicus Capital Partners marked the first close for its maiden fund late last year. Bigger PE firms, such as Baring PE India and ICICI Venture, are also raising new funds.
Meanwhile, IFC has an active direct private equity-style investment practice in India and it also lends to companies in the country. Besides, it has an active limited partner portfolio in India where it backs PE and venture capital funds focussed on India.
Earlier this year, IFC proposed to invest $20 million in IDG Ventures India’s third India-focussed fund.
Also this year, IFC has invested in the funds floated by PE firm Kedaara Capital, impact investment firm LeapFrog Investments Ltd as well as early-stage venture funds pi Ventures and Stellaris Venture Partners.
Last year, IFC put in $40.6 million in Indian PE firm Multiples Alternate Asset Management Pvt. Ltd’s second fund. The PE firm subsequently made the final close of the fund.