London-based private equity firm Greater Pacific Capital is planning to launch a new fund with a corpus of $750 million to invest in India and China.
The fund, which is expected to be launched next year, has plans to invest in companies especially based in Tier-II and Tier-III cities in India and having a turnover of between Rs 200 crore and Rs 1,000 crore.
“We have already made investments in 10 Indian companies in various sectors such as financial services, pharma, IT/BPO and industrials. Further, we are in the process of raising $750 million for funding more Indian and Chinese companies. We would like to invest in those firms, which are on an expansion spree,” said Pradeep Udhas, managing director of Greater Pacific Capital. He was in the city to address a function.
| FUND FLOW |
| * The fund, to be launched next year, will invest in companies based in tier-II and tier-III cities in India |
| * Sectors such as alternate energy, precision tooling, robotics, clinical research organisation, specialty retail, pharma are being looked at |
| * Of a $345-million fund launched earlier, 80 per cent has already been invested in India and China |
The company, which started operations in 2005, initially launched a fund with a corpus of $345 million. Eighty per cent of the fund has already been invested in India and China. In value terms, the investments in both countries were the same.
“With this fund, we have funded seven Indian companies and three Chinese companies,” he explained.
Commenting upon the potential sectors in which the fund was interested, Udhas said, “We are looking at sectors such as alternate energy, precision tooling, robotics, clinical research organisation, specialty retail, pharma to invest. We hope to roll out this fund by the second quarter of the next year.”
He also added that the slowdown in the US and European countries and also the volatility in stock market had stalled the launch of the new fund. It was earlier planned to be launched in the second quarter of 2009.
At the same time, he mentioned that tight global liquidity conditions have led private equity investments to grow as valuations of companies have come down. Also, with companies finding it difficult to borrow from banks and financial institutions, private equity firms are expected to play increased roles in providing funds for growth, he said.
On why the fund would focus on India and China only, he said, “We see immense opportunity in leveraging both India’s and China’s emerging markets. These two countries are emerging economies where the long-term prospects are good.”
