Originally targeting $500 million, the fund was oversubscribed, attracting investors from across the globe. Canadian pension fund Ontario Teachers’ Pension Plan anchored the vehicle and was joined by other sovereign wealth funds, pension funds, family offices, funds of funds and endowments.
However, while the US dollar fund formally closed during October, a INR 3.7 billion (€45 million; $60 million) tranche remains open for local rupee investors and will close before the end of the year. The final close will take the fund to its $600 million hard cap.
“We learned this from the China funds – there should be a deeper pocket of money in India for this asset class but there isn’t. We want this to be a small start [to that] and hopefully grow [the domestic LP base] over the years,” founder Kejriwal told Private Equity International.
We learned this from the China funds – there should be a deeper pocket of money in India for this asset class but there isn’t. We want this to be a small start [to that] and hopefully grow [the domestic LP base] over the years.
Manish Kejriwal, founder, Kedaara Capital
For each deal, the rupee and US dollar parts will both invest, with 90 percent of any investment in US dollars and 10 percent in INR.
The Kedaara team is made up of former executives from Singaporean sovereign wealth fund Temasek and private equity firm General Atlantic and will invest in buyout opportunities in India. The firm also has three high-level operating partners who will take the role of executive chairmen in its portfolio companies.
Kedaara has already been working on a number of proprietary deals and expects to close one or two before the end of March 2014, the firm said.
While Kedaara had originally planned a US dollar fund, a number of local friends, family offices and investors had requested access to the fund, but couldn’t invest due to the limitations on domestic LPs targeting US dollar-denominated vehicles, a source close to the matter explained to PEI.
Moreover, in August, India's Securities and Exchanges Board allowed domestic insurers to invest in private equity and other alternative asset managers, clearing the way for another domestic source of capital for the rupee tranche of the fund.
Kedaara's fund is the largest-ever independent first time vehicle raised for private equity investments in India, according to the firm. Other funds, such as Tata Capital’s $600 million debut Opportunities Fund raised in May this year, were bigger but are mostly connected to a large family group or corporation in India.