The Singapore-based private equity firm announced on Tuesday the closure of its third fund. Everstone Capital Advisors, which is the private equity arm of the Everstone Group, said it has raised $730 million with the fund, which aims to focus on investments in India and Southeast Asia.
According to the official statement, the Everstone Capital III LP received $700 million from limited partners such as institutional investors, both existing and new investors. The additional $30 million commitment was made by Everstone Group and its affiliates.
The majority of the capital came from investors in North America. The region’s investors committed over half of the funds, with European investors raising 37% of the funds. The rest of the investments came from other regions.
Furthermore, the fund managed to raise more money than it initially set out to fundraise. The fund, launched in October last year, was targeting $650 million, having raised $425 million and $580 million with the previous two funds.
The fund is committed to finding suitable investment in India and the Southeast Asia region. The firm is set to invest in a range of sectors including healthcare, education and financial services. It also hopes to find investments in consumer goods and services.
The fund has already made its first investment. The fund’s buyout of the bread and bakery business Modern Foods was completed last week. The private equity firm bought the business from Hindustan Unilever for an undisclosed sum.
Sameer Sain, co-founder and managing partner at Everstone Group, told LiveMint on Tuesday, “We will continue to focus on doing 70% of the deals as control ones (where the fund acquires majority control of the company) and rest to back top entrepreneurs in India and South East Asia”.
The firm has also made other investments with its previous funds in recent months. In July, the firm closed a deal with Massive Restaurants. The deal saw the firm invest around $13.4 million in the chain of restaurants and cafes run by the restaurateur Zorawar Kalwa.
Improving Market Conditions
Everstone Capital’s fundraising comes at a time when trust in the region’s markets is slowly recovering, especially in India. The start of the year has marked strong activity in the private equity sector, with firms making investments and raising new funds.
In fact, the Everstone Capital III fund is among the biggest India-focused funds of recent times. Sain echoed the trust in the region by stating in an interview, “We see a very strong deal pipeline and there are very few funds who are pursuing the strategy to undertake carve out or buyout deals”.
While the recent fundraising mood has been upbeat, private equity firms are still far away from the region’s biggest fund. In terms of sector agnostic funds, ChrysCapital’s fifth fund received $1.25 billion worth of commitments in 2007.
But private equity is making a strong return to India. It remains to be seen if the industry can break some of its old records in India this year. Check out DealMarket for more deals in the private equity market.