India Awards: Fundraising of the Year – Everstone Capital

Everstone Capital fought of stiff competition to win the Fundraising of the Year award for its second vehicle, which closed at $550 million in March after 15 months in the market. Other leading contenders included WestBridge Crossover Fund and Multiples Private Equity Fund.

Everstone's achievement is notable because it was the firm's first fundraising since realigning its business operations in India. While the overseas independent structure of the GP and investment manager has always been there, the firm's Indian onshore advisory team was housed in Future Capital Holdings, a joint venture with local company Pantaloon Retail.

Effective January 1, 2010, Everstone terminated the joint venture and created its own independent Indian advisory arm. Given that pre-marketing for the second fund started in December 2009, the firm had to reassure LPs over the changes. "Since it was so fresh, there were many questions - people wanted to understand the structure and relationship going forward," says Sanjoy Chatterjee, Everstone's COO.

Significantly, the firm sought to diversify its LP base. The first vehicle, which closed at $425 million in 2006, was underpinned by a $60 million commitment from Goldman Sachs. As a result, a host of investors, including financial institutions, family offices and high net worth individuals who knew Sameer Sain and Atul Kapur from their Goldman days, came on board.

"For the second fund, we wanted a more diversified and institutional LP base," says Chatterjee. "We were looking to attract long-term investors such as endowments, pension funds, sovereign wealth funds and insurance companies, as well as some family offices and fund-of-funds."

In the end, Everstone was oversubscribed and had to ask LPs coming into the fund towards the end of the fundraise to adjust their contributions so that the hard cap would not be breached.

If there is a consistent theme to India fundraising, Chatterjee attests that it is LPs carrying out an excruciating amount of due diligence on funds, analyzing firms in terms of team strength and stability, operational value add and the track record of the principals. The unknown factor today, as he sees it, is the impact of economic uncertainty in Europe on LPs' appetite for private equity.

Everstone's first fund, which is fully committed, has made 17 investments and so far secured two exits, from Capital Foods and Lilliput Kidswear, respectively.

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• Topics
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• Everstone Capital