Coller Capital acquired a stake in Bangalore, India-based ICICI Venture, investing $35 million for an interest in the firm’s India Advantage Fund. The deal is the industry’s first known secondary venture buy in India.
The deal closed within the past few weeks, according to London-based Coller, which declined to disclose financial terms of the transaction. ICICI Venture did not return calls for comment, but posted the news on its website.
ICICI’s India Advantage Fund is a hybrid private equity fund of about $226 million that invests in established mid-sized companies that are either based in India or are doing business in the country. It provides growth and expansion capital, buyout financing, mezzanine and distressed debt financing. The fund’s portfolio companies include Mumbai, India-based intermediate pharmaceutical provider Arch Pharmalabs and towel manufacturer Welspun India, also based in Mumbai, according to Thomson Financial (publisher of PE Week).
Coller Capital Partner Daniel Dupont, who oversaw the deal, says that firm has previously been involved with India-based companies, mostly through other investments. Dupont says that this transaction marks Coller’s first deal directly with an India-based private equity firm.
The firm is bullish on the prospects of private equity in Asia. Coller recently released a survey in which more than half of the private equity investors polled said that they planned to increase their investment in emerging market funds over the next three years. That same survey found that India was the most appealing emerging market for private equity, with almost 80% of respondents saying they found it an attractive place for private equity investment.
“India presents a lot of growth in private equity,” he says.
But Dupont cautions against calling the ICICI transaction a bellwether for future secondary deals in India.
“India is a growing market. It’s still a very young market in terms of private equity,” he says. “There are not too many secondary transactions around. That will develop in the coming years, in terms of secondary transactions. One has to let the primary market develop so the secondary players come.”