UC Capital launches €150m India-Euro fund

The fund will invest in small businesses in Europe, combining European management with an Indian manufacturing base.

UC Capital, a joint venture of investment firms Netherlands-based Urdaneta Capital and India’s Capvent has launched a €150 million Lions Growth Fund that will invest in small and medium enterprises (SMEs) in Europe.

The fund is set to invest in 10-12 companies in the industrial regions of Northern Italy, Spain, France and Southern Germany in the next four years, UC Capital said in a statement. It will target infrastructure (solar, construction, utilities and energy), manufacturing, advanced materials, automotive and healthcare companies that seek to improve standards of living in Asia.

UC Capital said European SMEs are facing a growth challenge due to stagnant economies in Europe. It would use Indian manufacturing synergies and access to other Asian markets to transform their business prospects.

It said it would also co-invest in minority positions in attractive European companies focused on growth.

Varun Sood, co-founder of UC Capital and Capvent told Private Equity International that the idea for the fund is to employ a manufacturing as well as a market strategy out of Asia. “We are proposing to our companies to take advantage of ‘Make in India’, an initiative by the government to encourage companies to manufacture their products out of India. We will be using India as a springboard and leverage on the technologies and management skills from European companies that have existed for many years, as well as the relationships they have, to get customers.”

Capvent, which operates in India, China and Europe, has invested over €1.2 billion in various private equity strategies, initially as fund of funds investor and then from 2003 as direct investor in Asia. It manages the Capvent Asia Consumer Fund, a 2012-vintage vehicle that raised $75 million. Sood took the company through its early stages of growth in Asia before moving to Europe to set up UC Capital.

That fund had recently exited its investment in Chinese online education company Tsingda eEdu Corporation and had generated return multiple of 2.9x and an internal rate of return of 32 percent, as reported by PEI.

Urdaneta Capital is a venture capital firm focused on restructuring European SMEs in the industrial and automotive sectors. It is based in Amsterdam, Netherlands with additional offices in Pune, India; and Barcelona, Spain.