AVCJ Awards 2019: Fundraising of the Year - Mid Cap: ChrysCapital Partners

Speed was inextricably linked to size in ChrysCapital Partners’ eighth fundraise. The India-focused private equity firm took just four months to reach a final close of $867 million in early 2019, up from $600 million in the previous vintage. That 45% increase made all the difference when it came to attracting commitments from sovereign wealth funds and pension funds, which account for half the corpus. Their large checks facilitated a swift process.

“We have benefited from the trend of LPs trying to consolidate their GP relationships globally. When they think about longevity, track record and experienced management, within India we stand out. The challenge has been their minimum commitment size in the context of the size of single-country funds. Even today, we are barely at the minimum size for them,” says Gaurav Ahuja, a managing director with ChrysCapital.

A further 25% of Fund VIII came from smaller primary capital allocators such as insurance companies, endowments and foundations, with fund-of-funds accounting for the rest. The shift in ChrysCapital’s LP base over time does appear to reflect its status as a beacon of relative stability in an Indian market that has been anything but that over the past decade. 

The firm raised $510 million for its sixth fund in 2012 – down from $1.25 billion in the previous vintage – following some team turnover and a decision to focus on smaller deals. It launched Fund VII on a much surer footing, having fully realized its first four vehicles and returned more than 100% of the fifth. This strong performance continued into the Fund VIII process.

ChrysCapital settled on a $850 million institutional hard cap based on an annual deployment pace of over $200 million – and as a precaution allowing that one year in four might be somewhat fallow. The target sectors were already set in stone, based on a belief that healthcare, financial services, IT services and consumer deliver the best returns, regardless of whether deals are minority or control, public or private.

However, there is likely to be change in terms of investment size as more larger-cap opportunities become available. Most transactions are likely to fall in the $25-200 million range, but ChrysCapital plans on using co-investment to target deals of up to $500 million.

“We’re seeing a lot more co-investment opportunities than 5-7 years ago. LPs have sectors they like or want to avoid; some are happy with minority while others prefer control; some want to get involved early in the process as a co-sponsor while others want to come in once a deal is essentially closed. We spend a lot of time with LPs understanding what ticks their boxes.”

Pictured: Kunal Shroff of ChrysCapital Partners accepts the Fundraising of the Year - Mid Cap award

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• Topics
• South Asia
• Fundraising
• Growth
• GPs
• India
• ChrysCapital Management
• AVCJ Awards