Creador closes Fund I, eyes Fund II

"Last year we deployed $51 million by ourselves - $64 million when you include co-investment - and we are in the process of closing two more deals: a $13 million investment in an Indian financial services company and a $35 million carve-out of a food business in Indonesia," Vasudevan, who set up Creador in 2011 after leaving India's ChrysCapital Partners, tells AVCJ. "We have room to do another 2-3 deals, but we are already starting to prepare for another fund."

There are two reasons for the compressed timeframe. First, Creador reached a first close of $80 million on Fund I in December 2011, three months after launch. It started investing almost immediately and now has three portfolio companies. A final close of $132 million is scheduled for the end of January.

Second, the private equity firm failed to meet its original target of $300-350 million for Fund I due to the challenging capital raising environment. The team feels it is able to invest $80 million per year and so the second fund will have a similar target to the first. But working with a smaller-than-expected pool of capital, they have been burning through the dry powder reasonably quickly.

"Within a few months of launching Fund I we realized the environment was very difficult," says Vasudevan. "We met 300 people in the process and closed about 30 of them. Despite our experience a lot of people thought of us as a first-time fund. Even though they liked the team and liked the fact we were putting in 25% ourselves, they said they would be more comfortable as Fund II investors. We are already getting commitments for Fund II."

On top of the GP's own commitment, three anchor investors accounted for 20% of the corpus. The remainder was split between foundations and family offices. Half the capital came from Asia Pacific, while Europe and North America supplied 25% each. The North American portion of Fund II is expected to reach 40%.

Vasudevan says that Creador's three existing portfolio companies - Malaysian chain Old Town White Coffee, Indonesian pay TV company MNC Skyvision and India's Cholamandalam Investment & Finance - are performing strongly. With Indonesia in particular, rapid growth eases concerns about rising valuations.

"These companies are expanding at 35-40% per year, so valuations are reasonable given the growth multiples," Vasudevan says. "Generally, the multiples in Indonesia are still below those of China and India."

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• Topics
• Fundraising
• Southeast Asia
• Fundraising
• Creador
• Indonesia