Fund focus: ChrysCapital banks on reputation with Fund VII

In the world of patient capital, a steady track record counts for a lot. This may be especially true in India, where a number of macro narratives have caused fundraising momentum to wax and wane dramatically during the past decade. According to AVCJ Research, Indian PE fundraising peaked at $10.3 billion in 2006 before falling as low as $5.4 million in 2011 and then clawing back to $6.2 billion last year.

Nerviness among LPs during these undulations has been understandable given a choppy domestic exit market, but managers that have proved themselves capable of surviving periodic droughts are continuing to sell an encouraging development vision. New Delhi-based ChrysCapital has recently flexed its muscle in this regard with an above-target close on its seventh India fund at $600 million.     

“There were some LPs who had invested in India 7-10 years ago but, due to poor performance, have shied away for a long time,” says Gaurav Ahuja, managing director at ChrysCapital. “We’re happy to be able to bring some of these people back into the country.”

LPs in Fund VII include both new and existing investors, with insurance companies, university endowments, family offices and global fund-of-funds represented. Returning LPs include Singapore’s GIC and Harvard Management Company.

ChrysCapital attributed the response to an almost two-decade history that has produced $4.2 billion worth of exits that represents about 8% of the national total. This was realized across 55 transactions representing all of the capital from its first four funds and more than 100% of committed capital from its fifth.

The latest vehicle launched in September 2015 and reached a first close of around $350 million that December. Investments will focus on the business services, financial services, healthcare, consumer and manufacturing sectors, and will comprise minority growth and select control deals. There have been two investments so far: participation in a INR10 billion ($149 million) funding round for non-banking financial company (NBFC) Hero FinCorp last September, and joining Reliance Capital and other investors to anchor L&T Infotech’s IPO last July.

Longevity is also expected to play a role in ChrysCapital value-add proposals for these companies going forward. “There are a lot of scars on our back that a new entrepreneur can benefit from without experiencing them firsthand,” Ahuja says. The firm is aiming to leverage 25-30 years of experience among its key partners, especially in the financial services and healthcare sectors.

“We have realized over 18 years that we have been investing in India that ownership stakes and rights you have that are detailed in the documentation are important, but only up to a point,” Ahuja continues. “The relationships, sector knowledge and operational experience in key sectors that we bring to the table helps build comfort and confidence, so entrepreneurs actually want to listen because we’re speaking their language.”

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• Topics
• South Asia
• Fundraising
• GPs
• Growth
• LPs
• India
• ChrysCapital Management