ChrysCapital sets record with $1.25bn fund(3)

India’s ChrysCapital has raised $1.25 billion for its fifth fund, surpassing the independent private equity manager’s $1 billion target. The latest fund holds the record of being the largest India-focused fund.

ChrysCapital has raised the largest India-focused fund to date by reaching a $1.25 billion (€912 million) hard cap and surpassing its target by 25 percent.

Before closing its latest fund, it managed $1 billion across four funds raised since 2000.

The independent private equity manager headed and co-founded by Ashish Dhawan returned to the market 18 months after closing its last fund on $555 million in December 2005, and attracted commitments from fifty to sixty institutional investors into the new fund without a placement agent.

It joins the ranks of several prominent independent private equity groups in the rest of Asia Pacific that have been quick to deploy capital. Consequently they have raised significantly larger follow-on funds within a fairly short period of time – under two years.

CDH China raised $1.6 billion for its latest and third China growth capital fund earlier this year, well above the $310 million CDH China II closed on in 2005.  In Australia, Pacific Equity Partners has attracted A$3 billion ($2.58 billion; €1.88 billion) for a first close on a fund that is targeting A$4 billion, about one year after it closed a A$1.3 billion fund focusing on Australia and New Zealand.

Thanks to increased commitments from existing investments and fresh commitments from new limited partners, ChrysCapital has been able to follow the footsteps of its peers elsewhere in the region.

The leap in fund size is however unlikely to change ChrysCapital’s strategy too much, sources say.  ChrysCapital has fully invested the $555 million fund in ten deals.

ChrysCapital now has greater flexibility to sign cheques from $30 million to $200 million for each investment. The manager expects to conclude twelve to 18 deals from the $1.25 billion fund, according to one source.

“The market itself is changing. There are opportunities that exist today that weren’t there in 2005 [when ChrysCapital was raising its last fund].”

Valuations have also risen over time and financial sponsors have to pay a premium to the stock market increase, he said.

He did not expect to see ChrysCapital managing the largest India-focused fund for long as international firms such as Warburg Pincus and The Blackstone Group are tipped to be raising India-dedicated funds.