Kedaara hits $750m hard-cap for oversubscribed Fund II – Update

Ontario Teachers’ Pension Plan is an anchor investor in the fund which is focused on minority growth investments in India.

Kedaara Capital, the India-focused private equity firm, has held a first and final close for its second fund, reaching its $750 million hard-cap, Private Equity International has learned.

The firm began fundraising for Kedaara Capital Fund II, which had an original target of $600 million to $650 million, in March this year, a source with knowledge of the fundraising told PEI. The fundraising was quicker than anticipated as the firm was prepared for a 12 to 18-month fundraising period, as is typical of most funds in India take, according to the source.

Canadian pension Ontario Teachers’ Pension Plan was an anchor investor in Fund II and was joined by sovereign wealth funds, pension funds, funds of funds, endowments and insurers. The International Finance Corporation also committed $40 million to the fund, PEI data showed.

Kedaara’s received re-ups from existing investors, including Abu Dhabi Investment Authority and German fund of funds RWB Private Capital Fonds. Fund II also received commitments from new investors such as Caisse de dépôt et placement du Québec and German insurer Allianz, the source said.

The firm had the option of raising more capital, garnering almost twice the demand from LPs, but decided it would stick to its hard-cap to avoid any deployment pressure, according to the source.

Fund II follows the same strategy as its predecessor, pursuing between 10 to 12 control and minority growth investments in India.

Kedaara’s debut fund raised $540 million in October 2013. Fund I has nine companies in its portfolio including logistic company Mahindra Logistics, machine components manufacturer Bill Forge, non-banking financial service company Au Financier, carton manufacturer Parksons Packaging, and diagnostic chain Vijaya.

Kedaara has sealed three exits from Fund I. It sold its stake in Bill Forge to Spanish-listed company CIE Automotive in September last year, delivering a 55 percent internal rate of return on exit. It also partially exited Au Financiers in June through an initial public offering, generating a 75 percent IRR. The firm had also just filed IPO prospectus documents for Mahindra Logistics which will got to market in the end of the year.

Kedaara declined to comment on fundraising.

Kedaara was co-founded by ex-Temasek executive Manish Kejriwal and former General Atlantic executives Nishant Sharma and Sunish Sharma in 2011. It was formed in partnership with Clayton, Dubilier & Rice.

Correction: An earlier version of this story incorrectly listed Temasek as investor in Kedaara’s first fund. Temasek has not participated in Kedaara’s funds.