Ascent Capital closes $350m Fund III

This is the first fund raised by the Indian growth investment firm in which it shares the fund management with former parent UTI Ventures.

Ascent Capital, a Bangalore-based firm focused on making growth capital investments in India, has hit the $350 million target for its third private equity fund, according to Raja Kumar, founder and chief executive of the firm. He declined to provide further details.

Ascent began fundraising in January. The fund was reportedly oversubscribed but did not raise more capital as its limited partners believed $350 million was the optimal fund size for the Indian growth capital segment, two sources told sister news site PEI Asia.

Ascent India Fund III will generally invest between $15 million and $20 million per transaction, a company official said in July. It will make growth capital investments, acquiring significant minority stakes in companies. While the fund is largely sector-agnostic, it will invest mainly in infrastructure services, retail, healthcare, education, logistics and power.

Ascent is the partially spun out team of UTI Ventures, one of India’s oldest private equity firms. The team is transitioning from being a captive fund to one that is independent, another source said.

For the first two funds the firm raised, the fund management company was owned by parent company UTI Asset Management. For this third fund, the management team and the parent share the ownership of the fund management company. “It is a transitional fund whereby the fund is neither fully captive, nor fully independent,” the source said, adding the team’s ownership of the fund management company will increase over time.

Ascent declined to comment on the transition or the structure of the firm.

A few of UTI Ventures’ investments include Consolidated Construction Consortium, an urban infrastructure service company; Koutons Retail, a men’s apparel retail chain; Laqshya Media, an outdoor media company; and Ind Barath Power, a power company focusing on gas, hydro, bio-mass and coal power projects.

While Ascent’s management team has not fully spun out, the team’s decision to go independent follows in the footsteps of two prominent Indian private equity professionals at captive funds who quit their respective firms to establish private equity practices of their own.

In April 2009, Renuka Ramnath, the managing director and chief executive officer of ICICI Venture, resigned and subsequently set up her own firm Multiples Alternate Asset Management. The previous year, Ajay Relan left his position as the head of Citigroup’s Indian private equity business, having been with the firm since its inception in 1995, to launch CX Partners, an India-focused private equity firm.