Tata Capital Healthcare Fund plans Fund II in 2016

The Indian firm’s current fund is three-quarters invested in India-based healthcare and life sciences companies.

Tata Capital is set to raise a second healthcare fund in the second half of next year that will be larger than its previous vehicle, Tata Capital Healthcare Fund (TCHF) partner Visalakshi Chandramouli told Private Equity International.

Tata Capital Healthcare Fund I has deployed nearly 75 percent of its capital and is working to invest the remainder over the next six to eight months, Chandramouli said.

“We continue to seek compelling investment opportunities in companies that have strong business fundamentals for growth and an ability to create trusted brands in the healthcare and life sciences sector,” she added.

The fund is simultaneously evaluating exiting a couple of investments made four years ago and are working to undertake a sale to a strategic partner, Chandramouli said.

Fund I is a 2010-vintage vehicle that raised about $75 million from domestic and foreign investors, and has additionally received $15 million from its limited partners as co-investments. Swiss fund HBM Healthcare Investments is an anchor investor. It has six portfolio companies that it has held for an average age of two and a half years.

Tata Capital’s first healthcare fund targets significant minority positions in portfolio companies through board representation and other significant shareholder rights.

Its investment strategy targets opportunities in India’s healthcare and life sciences companies which are in the early to mid-growth stage. Typical deal sizes for the fund are between $5 million to $15 million, with an average holding period of five years, according to Tata Capital’s website.

Since the first fund’s close in 2012, it has made investments in drug discovery and development company NovaLead Pharma, Gujarat-based manufacturer of sterile liquids Amanta Healthcare, and specialty healthcare providers Sandor Nephro Services and Lokmanya Hospitals.

It is managed by Tata Capital, a subsidiary of Indian conglomerate Tata Group.