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WestBridge garners $500m for evergreen fund

WestBridge has raised what it is calling India's first-ever Evergreen-style private equity fund with a life cycle of 20 years and extensive recycling provisions.

WestBridge Capital has raised $500 million for India’s first evergreen fund, a spokesperson from the firm confirmed.

The fund will differ from a typical private equity fund, which usually has a three-to-five year life span. Profits raised by the evergreen fund will be reinvested into the main capital pool, meaning the fund will have a life cycle of 20 years and could be extended by at least another 10 years, the spokesperson confirmed.

The fund targets deals in the range of $10 million to $50 million. LPs in the fund include endowments and foundations.

KP Balaraj, co-founder and managing director of WestBridge, told local press that the overcrowded private equity arena was the reason for the evergreen fund.

“There is too much private equity money in India,” Balaraj said. “Valuations are too high. In any market, returns fall when there is too much competition. We thought ‘why raise another fund when there is already too much of such capital available in the market?’”

In 2006, Bangalore-based WestBridge Capital merged with US giant Sequoia Capital to establish Sequoia Capital India. Prior to the merger, Sequoia and WestBridge had consorted on several deals including the acquisition of a 15 percent stake in internet portal for $36 million. That transaction saw them stave off competition from London-listed private equity firm 3i, which had opened an office in Mumbai.

In February this year, Sequoia announced that managing directors Sumir Chadha, Balaraj, SK Jain and Sandeep Singhal were leaving to re-establish WestBridge.

Investor fatigue seems to be growing in India. Newly established firm Creador Capital, run by ex-ChrysCapital managing director Brahmal Vasudevan, shifted allocations because of the overcrowded market.

Speaking to PE Asia in a recent interview, Vasudevan said that his firm would focus on Indonesia, which he said has similar demographics to India but is less saturated with private equity capital.