TVS Capital secures US$272m PE fund

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Homegrown private equity firm TVS Capital Funds has made a final close of its new rupee-capital fund on the back of significant demand from institutional investors in the last quarter of 2020, according to a spokesperson.

The final closure, which comes two years after the first closure in late 2018, has marginally overshot its target corpus of Rs 1,500 crore including the greenshoe option. The firm is also looking to launch its fourth fund in two years.

“We have raised $205 million in the blind pool with a potential co-investment pool of Rs 450 crore, taking the total AUM (asset under management) for the fund to $272 million. This marks TVS Capital Funds as the largest rupee-only capital fund, only through domestic sources,’’ said KI Mani, senior adviser to TVS Capital Funds.

Some of the investors in the fund include development finance institutions (DFIs) and insurance companies such as SIDBI, NABARD, HDFC Life, SBI Life, Bajaj Allianz, and New India Assurance, which account for 22% of the fund by commitment.

Mani added that about 26% of the commitments come from ultra HNIs, who include several professionals.

Like previous funds, all the LPs in this vehicle are domestic investors. This is in line with the investment firm’s “designed-for-India strategy”.

The average commitment from each LP was around Rs 7.5 crore with the sponsor groups  TVS and Shriram investing 7% of the fund’s corpus. The fund tapped over 200 investors for the total corpus.

About 45% of the contribution to the fund came from 34 leading family offices. Mani added that TVS Capital has formed a friends-of-the-fund strategy comprising individual investors who are tech leaders in their respective fields, to sharpen focus on tech investments.

These investors include Kris Gopalakrishnan, Lakshmi Narayanan, Krishnakumar Natarajan, and N Chandrasekaran.

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