IFC weighs up Zephyr’s second Indian fund

The Zephyr Peacock India Fund II, which is targeting $75m, will target growth investments in SMEs primarily in tier II and III cities and rural India.

International Finance Corporation (IFC), the World Bank’s private investment arm, is seeking to invest in Zephyr Peacock India Fund II, global private equity firm Zephyr’s second India-focused fund targeting $75 million.

The IFC will invest either $15 million or 20 percent of the fund’s total committed capital, whichever is lesser. The fund will make growth capital investments in SMEs primarily in tier II and III cities as well as rural India. These areas are “a relatively underserved segment of the market”, according to the IFC’s website.

IFC has also invested in Avigo SME Fund III, which held a first close on $150 million this February. The fund also makes growth capital investments in India.

Zephyr Peacock India Fund I, the fund’s predecessor, invests in sectors such as financial services, education, consumer-related businesses, manufacturing and infrastructure related services. It takes significant minority positions at preferred deal sizes of between $5 million and $20 million.

Zephyr’s previous investments include Time Technoplast, a polymer products maker; WLC India, a vocational training provider; Maxop Engineering, a die castings designer and maker; and Miles Software Solutions, a software provider. Founded in 1994, the firm manages $1.4 billion across 21 funds.

Zephyr did not respond to requests for comment.