New Delhi-based private equity firm ChrysCapital, which closed ChrysCapital V on $1.25 billion in 2007, has cut down its fund’s size by $300 million, a source confirmed to PEI Asia.
“It’s a proactive step,” Sanjiv Kaul, a managing director at ChrysCapital, told Indian daily Business Standard.
The firm has told limited partners it will not be investing the entire $1.25 billion raised and will not draw down capital fully although it has already received commitments and closed its fund, the source said.
ChrysCapital was unavailable for comment.
“Keeping in mind the investment climate in India, our call has been that the number and quality of good investment stories will get limited, so it doesn’t really make sense to carry on with a billion dollar fund,” Kaul told the daily.
Kaul added ChrysCapital has been providing its limited partners with an IRR of more than 15 percent every year and in the current environment, achieving a similar rate of return will not be easy. “So we took this call on our own,” he said.
Abraaj, TPG, Sun Capital, Candover and Permira are among the firms to have offered similar reductions to limited partners, although those cuts were made primarily due to the pressures faced by investors in a tight fundraising environment.
ChrysCapital has made four investments in publicly listed companies worth $500 million from its fifth fund thus far, and Kaul expects the remaining $450 million to be deployed in the next 18 to 24 months.
In all, the firm has made more than 45 investments since inception in 1999, when it closed its maiden fund on $64 million. Its second, third and fourth funds closed on $127 million, $258 million and $555 million respectively, according to data provider PrivateEquityConnect.
ChrysCapital invests in business services, consumer goods and services, financial services, healthcare and pharmaceuticals, infrastructure and manufacturing.
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