Creador makes first partial exit of Cholamandalam

Southeast Asia and India focused private equity firm Creador has made a partial exit from its investment in financial services provider Cholamandalam generating an internal rate of return of 33 percent.

Growth investor Creador has made a partial exit from its investment in Cholamandalam Investment & Finance Company Limited (CIFCL) in India.

The realisation generated a return of 2.8x on the original cost and an IRR of 33 percent, according to a statement.

The divested stake represents 36 percent of Creador’s total holding in the company and an exit value of $21.5 million. It will continue to retain an interest in the company as it sees further growth potential.

CIFCL is a pan-India financial services provider with over 534 branches across the country that provide vehicle finance, home equity finance, housing finance, and small and medium enterprise finance. Its assets under management are over $4 billion and it reported a profit after tax of $69.3 million as at year-end March 2015, according to the statement.

Creador invested $21.3 million to acquire a five percent stake in CIFCL in March 2012, marking the firm’s first investment through its debut fund.

The private equity firm targets unlisted and listed growth-oriented businesses in Southeast Asia and India, according to PEI Research & Analytics. Typical investments made by the company are between $10 million to $50 million.

The partial exit in CIFCL, combined with two earlier exits in OldTown White Coffee and Repco Home Finance Limited, have returned 65 percent of commitments for the first fund, according to a press release.

Creador’s debut fund is a 2011-vintage vehicle that raised $132 million.

Its second fund held a final close on $330 million in October 2014 after receiving a last minute commitment from fund of funds Hamilton Lane, as reported by Private Equity International.

It is currently raising funds for its third fund, which has a hard cap of $500 million and held a first close on $200 million in July.

Creador III’s strategy is similar to Creador I and II but with larger cheque sizes. It will also target consumer-driven companies in the Philippines and Sri Lanka, according to a source familiar with the matter.