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Private equity firm Creador has made a final close of $415 million in its third round of funding. The PE firm, which invested in 23 companies across India, Indonesia and Malaysia, from its last two funds has added two new geographies and two coverage sectors for the new fund.
Anand Narayan, Senior Managing Director, Creador Advisors India, which advises Creador in its investments in India and South Asia, has confirmed the development adding that it took about a year to raise the money from the LPs. With this Creador has cumulatively raised about $900 million in about 5 years across three funds. "This successful performance is a testament to Creador’s focussed approach in its target geographies and strong value creation for its LPs. The third fund took about a year, which was reasonably a good achievement at the current environment," he adds.
Creador has backed companies such as City Union Bank, Somany Ceramics, Vectus Industries and others.
Unlike its peers, Creador has been returning to the LPs more often with good track record (returns), says an industry analyst.
For example, on an average, private equity funds raise money once in 5-6 years, but Creador does it once in 3-4 years. This strategy allows the fund to consistently focus on quick value creation and target similar size growth opportunities.
For example, on an average, private equity funds raise money once in 5-6 years, but Creador does it once in 3-4 years. This strategy allows the fund to consistently focus on quick value creation and target similar size growth opportunities.
Creador invested its first fund $135 million in about 18 months. Its India investments, Cholamandalam Investment and Finance Co and Repco Home Finance, generated a $ return of 3.4x returns over an average holding period of just over 2 years. Industry experts acknowledge that typically the industry averages around 1.5x that time frame.
“We returned 110 per cent of the fund in less than four years. You will rarely find this kind of a track record outside,” said Narayan.
Creador’s second fund was $330 million, which was deployed in around 2.5 years. The India investments from this fund include PC Jeweller, Vectus Industries, Somany Ceramics and Ashiana Housing. The balance was invested in Malaysia and Indonesia.
Narayan said that the PE firm's sweet spot will continue to be $20-50 million. As far as sector and geography concerned, two new sectors were added for the third fund includes health care and technology, while the two new geographies are Philippines and Sri Lanka.
Creador has invested one third each in India, Indonesia and Malaysia. Narayan said, the fund invests based on opportunities, and that this allocation is not by design or contract.
The fund has invested around 50 per cent in financial services, while the balance in sectors like building materials, FMCG, retail, business services, media.
From the third fund, already two investments in India have been made including one in City Union Bank ($19 million) and Corona Remedies ($20 million) and a home improvement chain in Malaysia.
, Creador provides growth capital to companies and largely focusses on being a value added financial & strategy partner and prefers promoters or existing management to run the show in its investments.
The PE firm hopes to deploy the third fund completely by end of 2018 or early 2019.
