Gaja holds $130m first close

Gopal Jain’s India-focused firm expects to hit its $250m hard cap

Private equity firm Gaja Capital has raised $130 million towards its latest India fund, which expects to exceed its $225 million target and hit the $250 million hard cap, Gopal Jain, founder of the firm told Private Equity International.

The fund, Gaja's third, launched in September 2014 and expects to close at the start of 2015. It expects to invest about 40 percent of its funds in education-oriented companies.

Investors in the vehicle include a leading Asian fund of funds, a well-known European development finance institution and the International Finance Corporation, with the firm putting in a GP commitment worth 5 percent of the hard cap.

While Jain admits he launched the fund in one of the worst fundraising environments ever, he says the market has improved.

“There has been significant consolidation in the market, and I think the bar GPs have to [reach] to raise capital in India has risen significantly,” Jain said.

“Sentiment was at its lowest when we launched the fund – there [had been] disappointment with India, because the returns weren’t great, the distributions had not been great. But the May to August [2013] currency crisis was the proverbial straw that broke the camel’s back.”

However, while he believes the current conditions are better, he admits LPs will still have hesitations.

“[Now], sentiment has improved from a point where a very significant section of LPs were disinterested in the India story. I don’t think people are ready to pick up their cheque books, but they are at a point where they are ready to listen to the India story again.”

India funds have been gaining traction in the market, with Creador, an India and Southeast Asia fund raised by ex-ChrysCapital managing director Brahmal Vasudevan, closing on $330 million having raised its hard cap to accommodate a last minute commitment from Hamilton Lane, PEI reported last week.

The latest significant fund coming to market was Everstone Capital Partners with its third private equity vehicle, targeting $650 million with a hard cap of $700 million. The firm has declined to comment on fundraising but industry sources tell PEI it is going “very well”.