Financial services group Avendus Capital has launched its third private investment in public equity (PIPE) fund, Avendus India Opportunities Fund III.
The INR5bn ($91.1m) fund will use a “private equity approach” to invest in listed mid-cap companies and will be actively involved with portfolio companies to add value by improving investor relations and corporate governance.
The firm pointed out that 2,800 of the 3,000 listed Indian businesses have a market capitalisation of less than $910m. Most of these companies are under-researched, which presents “immense” opportunities to fund willing to undertake in-depth valuation, according to Manoj Thakur, chief executive of Avendus’ subsidiary PE Investment Advisors.
Thakur, said, “The key differentiation of the fund is its active engagement style. There is major scope to improve investor relations and corporate governance of midcap companies.
“We identify potential winners in the midcap space and help them in their pursuit of becoming highly regarded companies by the investor community.”
The fund will target companies exposed to India’s rising discretionary spending, rapid urbanization and increasing rural prosperity. It will make up to 14 investments, taking stakes of around five per cent with an investment period of between two and three years.
The past two funds of Avendus PE Investment Advisors, launched as portfolio management strategies, have outperformed the broader indices. The first and second funds have given compounded annualised returns of 19.4 per cent and 21.9 per cent respectively.
Copyright © 2013 AltAssets