Lighthouse Canton (LC) has joined hands with alternative investment exchange Alta Group to tap a new investor segment for its limited partners’ (LP) mix, as the Singapore-based global investment firm aims to boost its fundraising pace for venture debt strategy.
The fund house’s venture debt strategy includes a South East Asian and an India-focused venture debt fund. The capital raised via Alta, will, therefore, be utilised by both the debt funds, according to Sanket Sinha, global head of asset management, LC.
Alta is a digital marketplace for alternative investment. With this partnership, LC will be able to onboard investments from Alta’s mass-affluent and high net worth individuals’ clientele, as per a statement.
Sinha added that the capital raised by leveraging Alta’s investment network may contribute about 3-5% towards achieving the Rs 550-crore India-focused venture debt fund’s final close.
LC marked the first close of the debt fund last month, raising about Rs 155 crore, or about 28% of the debt fund’s targeted corpus. For the first close, it largely received commitments from family offices and ultra-high-net worth individuals (UHNIs), Sinha said.
“We are seeing strong interest from family offices going forward as well, and institutional participation is something we are working towards,” he said.
Even as the fund plans to mark a couple of closes for its India focused category-II alternative invest fund (AIF), it expects to close the fund nearly two years after the first close, Sinha said.
“We are looking to do the next close over the next few months,” Sinha said, adding, “We are hopeful that we will be able to do it (final close), ahead of the time frame.”
So far, it has made investments in four companies while fund disbursement is due for another, the asset management head said. It expects to close about 7-8 investments from the India-focused venture debt by the end of the current quarter, he added.
Sinha also pointed to the growing popularity of venture debt investments in India, which currently has penetrated only about 2% in the country and in the SEA region. “We see tremendous opportunity for venture debt and expect the size of this market to grow 3-4 times in the next five years,” he noted.
Last October, Edelweiss Wealth Management launched a Rs 3,000 crore venture debt fund. Chennai-based Anicut Capital is looking to mark the first close of a Rs 1,500 crore fund, its third debt fund, by April. Alteria Capital marked the first close of its third fund at Rs 1,000 crore in October.
Amid an overall downturn in the private investment space, Sinha said that a section of LPs, across the ecosystem, have turned to a wait-and-watch mode. This comes in the backdrop of a correction in startup valuations, followed by some investors marking down their investments.
In May 2022, SoftBank Group Corp has marked down its investment in Paytm parent One97 Communications to $800 million as of March 2022, followed by a similar move in August when it marked down its investment in Paytm by $400 million for the quarter ended June, adding to its overall loss of $23.1 billion for the period. In November, it sold about 4.5% of its stake in Paytm for $200 million.