Reliance Capital has launched Reliance Equity Advisors Limited (REAL) as its private equity arm and is raising an India-dedicated private equity fund that will target $1 billion (€645 million). The new subsidiary will provide the entire gamut of private equity advisory services.
Ramesh Venkat, currently the CFO of the Anil Dhirubhai Ambani Group, is leading the initiative and is a director of the new firm.
Venkat told Indian daily The Economic Times that “the initial response [from prospective investors] has been very good. There is good investor appetite for our fund. We expect to close the fund in a few months.”
The Anil Dhirubhai Ambani Group will be the anchor investor in the fund and will contribute about 15 percent to 20 percent of the fund’s capital. The remainder of the fund will be raised through two vehicles, one based in the Mauritius and the other in India, the newspaper reported. It is likely that the vehicle based in the Mauritius will be used to raise capital from overseas investors.
The firm has set up an investment team of 15, comprising of professionals hired from other private equity firms including Actis, ICICI Venture and Sequoia Capital, according to a Bloomberg report.
Venkat said that the fund will focus on providing growth capital to businesses in the services, logistics, real estate and pharmaceutical sectors and will invest between $15 and $100 million per transaction. It will also provide companies with means to restructure their businesses and will lend them money and expertise to help them acquire assets overseas.
Reliance Capital, the private equity arm’s parent company, has been making private equity investments as well, but they have comprised solely of proprietary deals.
Reliance is not the first conglomerate in India to disclose its private equity ambitions. Tata Capital, the financial services arm of the Tata Group, is launching a private equity funds business as well. A Tata Capital spokesman told PEO last month that the firm is “looking at a play” in the private equity business and “this will be through a composite mix of sector agnostic and sectorally aligned funds”.
Reliance Capital could not immediately be reached for comment.