ChrysCapital, one of India's largest home-grown private equity firms, has closed its eighth fund at $850 million, taking its total assets under management to over $4 billion, said a senior company executive.
“Given our strong pace of deployment of over $200 million per year and an active pipeline, we decided to embark on raising eighth fund in August 2018. The fund was significantly over-subscribed past its hard cap of $850 million by October,” said Kunal Shroff, co-founder and managing partner, ChrysCapital.
Around 80% of the current fund, ChrysCapital VII, which was raised in late 2016, is now deployed across seven core investments. The freshly minted fund did not see much churn in the limited partner (LP) base. “All major existing investors continued their commitment leading to a very high re-up rate,” said Gaurav Ahuja, head of fundraising and investor relations, ChrysCapital.
The firm also saw significant demand from several new investors, including sovereign wealth funds, large public pension funds, major insurance companies and global fund-of-funds, among others. Shroff declined to divulge the specifics or the names of the investors.
From an investment size perspective, the PE firm aims to keep the funnel broad. While it will continue to look at small deals, it now has a bigger appetite to look at larger deals and will continue to rope in investors opportunistically. There is no fixed co-investment pool with its LPs though.
“We are comfortable writing equity checks of $200-plus million from the fund, and of $500-600 million with the support of our investors, many of which are large sovereign wealth funds, public pension funds, and other institutional investors that are able and willing to back ChrysCapital in co-investment opportunities. We have offered more than $650 million of co-invest opportunities to our investors in the last 3-4 years alone, including investments in NSE and Mankind Pharma,” added Shroff.
In June 2018, the fund had acquired a 10% stake in Mankind Pharma for about $325 million, a portion of which came from its LPs.
In terms of its investment strategy, the firm will continue its focus on four core sectors-financial services, healthcare, business services, and consumer-but may selectively evaluate deals in other sectors including manufacturing and digital. “We have been looking at the manufacturing space for a while. We are trying to understand the digital space more closely and build expertise here,” said Shroff. The firm will also look at expanding its pool of advisors by ramping up the operational bandwidth it offers to its portfolio companies. It recently hired former State Bank of India chairperson Arundhati Bhattacharya as a senior advisor.
ChrysCapital sold LiquidHub to Capgemini for about $500 million in February 2018. “This was the largest strategic sale by any India-focused PE firm, and we delivered a 4 times dollar return in 4 years to our investors,” said Shroff. It had also exited City Union Bank and Torrent Pharma, both of which delivered 3 times dollar returns, he added. It has invested $3 billion across 85 companies, and fully monetized five funds, besides making $5.5 billion in realizations.
The PE landscape in India has entered a mature phase backed by a steady stream of investments, record exits and rising levels of dry powder. Investor confidence was evident from the $34 billion of investments in 2018, according to PwC India.