Indian investment group Motilal Oswal has reached an $87m second close on its latest SME fund, it is understood.
The close puts the firm halfway to its $175m target, which Motilal revised down from $200m amid a difficult fundraising market.
Despite a strong start from the fund in reaching a $73m first close in January it has struggled to add capital since, although it still expects to achieve a final close by the end of the year according to a report in the Asian Venture Capital Journal.
It said Squadron Capital was believed to be among the investors in India Business Excellence Fund II, which will invest between $10m and $25m per deal.
The report added that one third of the fund had been earmarked for PIPE deals.
Motilal is thought to be targeting overseas investors for about one quarter of the fund, which will be raised as a separate component.
The firm’s first buyout fund raised $125m in 2007 and targeted a smaller average ticket size of between $5m and $15m.
IBEF I has made 13 investments including packaging company Time Technoplast, dairy producer Parag Milk Foods and biscuit, bakery and condiment supplier Mrs Bector Foods.
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