IL&FS to wrap up $400 mn PE fund

IL&FS Investment Managers Limited (IIML), the publicly listed private equity arm of IL&FS, is set to close its $400 million fund by October 2007. It will have its first closure of $150 million by July-end and the remaining would be wrapped up by October.

This is IIML's sixth fund and will be its largest fund after the $525 million real estate fund launched in 2006. With this $400 million fund, IIML is more than doubling its fund size from the earlier $153 million Leverage India Fund.

IIML had started the roadshows for this $400 million fund in September 2006. According to company sources, the investors in the Leverage India Fund such as Taib Bank of Bahrain and Punjab National Bank are investing in the fresh fund.

The new fund is expected to focus on late-stage funding for profitable, cash-generating companies. "IL&FS PE Fund has been lately focussing on the pre-IPO and private investments of listed companies (PIPE), which enable the fund to achieve early exit," an industry analyst explained.

With a focus on infrastructure financing, 29 per cent of IIML's funds are invested in infrastructure, followed by manufacturing (19 per cent), telecom, media and consumer services (15 per cent each), IT&ITeS (13 per cent) and life sciences accounting for the remaining 9 per cent.

IIML has a decent track record of exiting its investments and has generated annual returns of 27 per cent in US dollar terms.

Moreover, Coller Capital, a global fund focussed on secondary interests in venture capital, entered IIML's Leverage India Fund giving exit opportunities to investors much before maturity. IIML currently has $900 million under management.