LPs assume control of Exhilway's emerging markets fund
LPs have assumed control of Exhilway Global Opportunities Fund - a vehicle set up by US-based hedge fund and emerging markets private equity GP Exhilway Global - apparently following difficulty sourcing deals.
The fund was launched in late 2013 with plans to raise $2 billion, and around $1 billion of this was to be invested in India. In the end, the fund only managed to raise $203 million. Commitments will be transferred to new investors brought in to take charge of the fund. The vehicle has also seen fresh commitments of $300 million.
According to a release, investors were unhappy with the quality of the assets the fund was targeting. It also cites issues over poor corporate governance, and disorderly financial records of the target companies. The manager has denied these allegations.
When it launched, the fund was understood to be targeting high net worth individuals in the UK and North America. It was raised in the US through general solicitation - as permitted, with additional compliance burdens, under reforms announced in the JOBS Act - and planned to spend $30 million on digital marketing.
The fund also claimed to be the first-ever hybrid private equity vehicle, giving investors a minimum debt return plus unlimited potential to make money over the equity pledged by the promoters of the investee companies.
The investors will now re-brand the fund. Exhilway Global Opportunities Fund is expected to conclude at the end of this year. Exhilway, which is headquartered in Texas, was first set up in 1974 as a hedge fund and moved into private equity in 2012.
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