OPIC commits $42m to Lighthouse’s India fund
The Overseas Private Investment Corporation (OPIC), a development finance arm of the US government, has committed up to $42 million to Lighthouse Funds’ second India vehicle.
India 2020 Fund II, which is targeting $125 million, reached a first close of approximately $60 million in August 2013. This includes an investment of $25 million from the International Finance Corporation (IFC).
Lighthouse raised $100 million for its first fund in 2008. The investment strategy for Fund II is largely consistent with that of its predecessor. The GP will seek significant minority stakes in small- and medium-sized enterprises (SMEs) with $5-100 million in revenue an annual growth in excess of 50%. It typically deploys $5-15 million per transaction.
Sectors of interest include healthcare, education, rural consumption and agribusiness - areas that are likely to benefit from and promote consumer demand and purchasing.
Founded in 1971, OPIC has supported more than $200 billion of investment in over 4,000 projects. Its portfolio was worth $18 billion at the end of 2013, of which 15% was deployed in Asia. The agency made $3.9 billion in new commitments over the course of the year, with $178 million going to investment funds.
Earlier this year, OPIC committed $100 million to Quadria Capital's South and Southeast Asia-focused healthcare fund and $66 million to CX Partners' India mezzanine fund.
India-focused GPs have raised nearly $2.4 billion so far this year, up from $1.9 billion in 2013. This remains well short of the 2006-2008 boom period when $23.4 billion was raised over the course of three years. The domestic GP base has consolidated significantly since then.
A number of Indian private equity firms are either in the market or about to enter it. Everstone Capital, Gaja Capital, ICICI Venture, CX Partners, India Value Fund Advisors, Samara Capital, Jacob Ballas and Multiples Alternative Asset Management are collectively looking to raise in the region of $3 billion.
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