Creador to raise $145 mn through second fund

Creador, a private equity fund set up by former ChrysCapital general partner and managing director Brahmal Vasudevan, plans to raise $145 million within the next three-four months for its Fund-II, whose total size is $250 million. It had raised $105 million in August 2013.

The PE firm, which is focused on long-term investments in growth-orientated businesses in India, Indonesia, Malaysia and Singapore, had raised $130 million for its debut fund in 2012. The firm was eyeing a size of $300-350 million for Fund-1, but it could manage to accumulate only $130 million because of tough market conditions.

According to Vasudevan, founder and CEO of Creador, it will be a smooth drive for Fund-II.

"If we would have said that our fund is India-specific, then we would have had a problem in attracting investors. We look at these four countries with our unique bottoms-up approach so that we are able to source and close deals quickly," he said.

From Fund-I, Creador invested around $35 million in India, $26 million in Malaysia and the rest in Indonesia.

"Creador is essentially a growth-oriented investor, with a goal of providing smart capital to promoters with well-established businesses. During the period of the relationship, Creador works alongside the promoter and management on various areas of value creation in order to maximise shareholder returns while creating a sustainable platform for the promoter to further the business," said Vasudevan.

Anand Narayan, senior managing director at Creador Advisors India Private Limited, a consultant to Creador, said: "While a lot of deals continue to flow into India, the country is going through macro economic and structural issues. Whether the investment climate is conducive, is difficult to say. We have to factor in the rupee depreciation, which is impacting badly, valuations are also high and there is brutal competition which inflates the seller expectations."

Creador's strategy is to look at sectors, which are consumer oriented or in other words the target companies are literally involved in the daily life of people, said Narayan.

The PE firm looks at three things before choosing a company. Sectoral growth and the company's appetite for growth; quality of the company's management; and, valuation.

In India, the firm has investments in Cholamandalam Investment & Finance Company Limited and Repco Home Finance Limited. It is also set to acquire a 11.19 per cent stake in Somany Ceramics, whose board has already approved a stake sale for Rs 50 crore. The deal awaits shareholders' approval.

In March 2013, the fund had picked up Godrej Consumer Products' entire stake in Indonesian snack food company PT Simba Indosnack Makmur.

"As a PE firm, we need to focus on exits and our investors need to remember us for that. We feel this space (consumer-oriented) can give good returns," said Narayan.

While the fund is yet to make any exits in India, it made its first exit in Malaysia when it sold its 10 per cent stake in Malaysian restaurant chain and instant coffee brand OldTown White Coffee for $30 million, generating a 2x return.