A new India-focused private equity fund High Street Capital, backed by the Bhartias of Jubilant Organosys and Life Insurance Corporation (LIC) as anchor investors, is approaching its first close of $50-70 million by December this year, sources familiar with the developments said.
The rupee denominated fund is targeting to raise $100 million and will invest in small and medium enterprises (SME) in the infrastructure enabled services sector beginning the first quarter of 2011.
The Bangalore-based fund, with a core team of four members, is looking at raising the commitments mostly from domestic investors. Being an anchor, the fund also marks the foray of Jubilant promoter family into India's red hot infrastructure related play.
Several Indian corporate houses, unconnected with infrastructure till date, are looking at the private equity fund route for taking an exposure in the key growth sector. The Ajay Piramal Group, which has a presence mainly in lifesciences, has a real estate and healthcare private equity fund. The healthcare focused fund, IndiaVenture Advisors, also taps the infra opportunity directly and invested in C&C Constructions, an EPC player in roads and highways. Religare Enterprises has also backed a JV in this space called Milestone Religare, which till now primarily invests in soft infrastructure themes like education and healthcare.
High Street Capital will look at investing in privately-held SMEs who would benefit and accelerate their growth as a result of the country’s infrastructure buildout over the next several years. Some of the infra enabled services play it could tap include logistics and warehousing apart from domains in healthcare such as diagnostics. However, VCCircle could not ascertain exact details and plans of the proposed fund. Sources said, Highstreet Capital was also in the market for expanding its team with the initial close approaching.
Currently, the team consists of Vishnu Amble (formerly with Abraaj Capital and Carlyle Group), Narayan Murthy (prior stints include buyout fund Cyprus Group and AT Kearney), Mohammad Asif (Anand Rathi and Unit Trust of India ) and Raman Mangalorkar (who previously headed the consumer and retail price of AT Kearney Asia Pacific).
According to the fund's website, the six-year fund is targeting 25% IRR and offer a 10% per annum preferred return.
The infrastructure sector has been a favourite among private equity investors with global majors Blackstone, Temasek and Actis making major investments this year. PE deal values have already struck a high of $1.7 billion for first eight months this year, over twice last year and much higher already in eight months compared with $1.4 billion in 2008.