FidelisWorld seeks up to $300m for second Asia fund

Anand Krishnan (pictured), managing partner of FidelisWorld, confirmed the target size and said that preparations are being made for launch. "The second fund, much like the first, will focus on profitable or near-profitable, digitally-enabled businesses driven by robust underlying consumer demand in India," he added.

Fund I, which closed on USD 100m in 2013, had an LP base primarily comprising institutional investors. For Fund II, Krishnan would prefer a mix of institutional investors and family offices.

The likely increase in fund size means the firm will make larger investments. The average ticket size for Fund II will be USD 25m-USD 30m – compared to USD 15m-USD 20m in the previous vintage – and it could swell to USD 50m-USD 60m with LP co-investment.

"We are heavy believers in bringing LP co-investors on board with us, which can be very helpful in terms of implementing our international business development strategy," Krishnan explained.

Krishnan founded FidelisWorld in 2012 following a decades-long career that included stints as a managing director at J.P. Morgan and CEO of Dubai International Capital. In these and other roles, he was responsible for assets worth more than USD 5bn.

FidelisWorld makes minority growth investments. There have been six to date: gaming centre operator Smaaash Entertainment, outdoor apparel manufacturer Wildcraft, gourmet foods company Wingreens Farms, sports arena management business Techfront, sport-focused digital media agency Sportz Interactive, and cricket content platform syndication Wisden Asia.

Krishnan noted that the firm's deal pipeline is robust, with multiple investments already being tracked for Fund II. This was also the case for the first fund, which began deployment within six months of its first close because the team had deals lined up. It typically cultivates relationships with founders and promoters long before moving in on an investment.

"They recognize our global expertise, and if we are not able to deploy in a timely fashion we encourage and help promoters secure growth capital elsewhere. The key is establishing an ongoing relationship, so if there is a need for capital at a later stage, we are the first point of contact," he said.

One key metric for FidelisWorld when assessing potential targets is whether the company has global aspirations. This helps mitigate risks tied to issues like geopolitics and currency depreciation. "We call it a natural hedging strategy where we grow the company overseas and have a more balanced portfolio from a revenue perspective so that our currencies are hedged," Krishnan noted.

Three of the six existing portfolio companies have been exited – Sportz Interactive, Techfront and Wisden Asia – resulting in distributions to paid-in (DPI) for Fund I of 0.75x. "We would have reached 0.8x in March 2020, but one of our exits got delayed because the incoming investors pulled out of the deal owing to the COVID-19 pandemic," Krishnan noted.

The target return for the remaining investments is at least 2x, with Wildcraft set for an IPO when the timing is right. "It's unfortunate the markets aren't great right now, but the company is performing well, feedback has been good, and we are targeting an exit within 12 months," Krishnan said, adding that he hoped the other two investments can be exited within 18 months.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Southeast Asia
• Fundraising
• Consumer
• Technology
• GPs
• Growth
• Asia
• Fidelis World Asset Management
• Fundraising