Former head of SBI Macquarie seeks $500m for India fund

The Violet Arch Strategic Themes (VAST) fund, is seeking foreign and domestic LPs willing to commit $50-75 million, The Business Standard reported. Violet Arch started its operations by acquiring Alchemy Shares & Stock Brokers and recently recruited New York merchant bank Berenson & Co. as a strategic investor, selling a stake of around 7%. It has another tie up with London-based ISM Capital.

Kolkata-based SREI Group has a significant minority stake in Violet Arch.

India has seen a spate of spinouts in the last couple of years and some have fared better than others. Renuka Ramnath, former CEO of ICICI Venture, closed her new firm's debut fund at $450 million late last year, while Ajay Relan, former head of CVC International India, secured commitments of $515 million for CX Partners' first vehicle, which closed in 2010.

Those who currently have vehicles in the market or are preparing to launch them include: Subbu Subramaniam, who founded his independent fund MCap Fund Managers in 2010 after spinning out of Baring Private Equity Partners India; P.R. Srinivasan, who left Citi Venture Capital International to set up Exponentia Capital; and Manish Kejriwal, former head of Temasek India, who is planning an independent vehicle with Sunish Sharma, former managing director of General Atlantic.

VCCircle reported in December that Rajesh Khanna, former managing director at Warburg Pincus, had decided to cease operations at his new firm, Arka Capital, due to the difficult fundraising environment.

Industry participants expect conditions to deteriorate in 2012, with first-time fund managers who can't boast strong track records, struggle to attract commitments. In 2009 and 2010, LPs invested $4 billion and $2.5 billion, respectively, in Indian funds. A total of 29 vehicles held final closings in each year. Nearly double are expected to seek capital in 2012.

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• Topics
• Fundraising
• South Asia
• India
• Fundraising
• Multiples Alternative Asset Management
• MCap Fund Managers