India’s Lighthouse Funds back with third vehicle

The lower-mid market firm has raised $80m so far from existing investors.

Indian manager Lighthouse Funds is eyeing a first close of around $130 million for its latest vehicle by the end of December, Private Equity International has learned.

The Mumbai-based firm so far raised $80.15 million from 23 investors in October, according to a filing with the Securities and Exchange Commission, towards a $200 million target. The firm expects to garner the remaining first close capital from new investors based in Hong Kong, Singapore and Japan, before a final close in the first half 2018, Mukund Krishnaswami, founding partner of Lighthouse Funds, told PEI.

Fund III will have the same strategy as the firm’s previous funds, investing between $5 million and $20 million in lower mid-market consumer companies. The firm hopes to close its first investment for Fund III in the next month. Expected returns for the fund are between 2.5x and 3.5x and mid-20s percent internal rate of return, Krishnaswami said.

Predecessor India 2020 Fund II, which is fully invested, closed on its $135 million target in 2014, according to PEI data. Meanwhile its 2008-vintage debut vehicle India 2010 Fund has returned about 1.7x invested capital on a local currency basis to its LPs, as reported by PEI.

Backers of the firm’s two previous funds include the International Finance Corporation, Overseas Private Investments Corporation as well as global funds of funds.

The firm has previously invested in ethnic apparel retailer Fabindia, beauty and personal care products company Kama Ayurveda and laminates manufacturer Stylam.