Motilal Oswal’s Ghosh moves on to start own fund

The fund, named Contrarian Opportunities Fund I,  will invest in early to growth stage enterprises in education, healthcare, housing, energy, livelihoods and agribusinesses.

The fund will provide Series A funding of $500,000 to $5 million in two to three rounds. Ghosh added the fund will have a 10-year life cycle with the option of two one-year extensions, and a five-year investment period. It will target an IRR of 22% in INR terms, with a hurdle rate of 8% IRR.

"There is an opportunity in Series A as fewer funds invest at this stage, compared to Series C or D investments" Ghosh told AVCJ. "We will start by investing in smaller sums of $500,000 to $1 million, upto a maximum of $5 million over various rounds, so we can cut our losses early if need be."

"We are looking at restricting our losses to around 10% of capital invested, and to deliver a return of around 22 to 24 % to our LPs", he added.

The fund is to have an advisory board supporting the core investment team through the investment process and will provide strategic support to its portfolio investments.

Ghosh originally intended to launch the Sustainable Social Impact Fund, which had a target of INR2.5-3 billion ($47-59 million), while with MOPE, but decided to launch a  fund of his own. He will continue his association with MOPE as an advisor and will serve on the investment committee of all its unds.

According to sources familiar with the matter, MOPE's social impact fund is likely to be shelved. The firm is currently raising capital for its second India Business Excellence Fund, with a target size of INR9 billion ($166 million).

Prior to joining MOPE, Ghosh was co-founder and group president of government and development banking at YES Bank. He headed the operations of the agriculture and rural banking, microfinance and microhousing, and socially responsible investing divisions.

Investing for social good is a concept which has thrived in the country over the past three years. Social VC investments in the first nine months of 2012 totaled $103 million across 31 deals, according to Venture Intelligence research.

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