 "IndEu Capital to raise $70 mn to invest in Indian luxury market")
"We will close the fund before the end of this calendar year and will announce our first investment in India in the first quarter of 2016. The fund has participation from family offices and private investors, from regions such as Western Europe, Southeast Asia and the Middle East," said Francois Arpels, managing partner, IndEU Capital.
IndEU will be the second fund dedicated to invest in Indian luxury segment. L Capital Asia is the other fund, which had invested in Indian clothing retail firm Fabindia. Venture Intelligence data shows L Capital Asia had last announced the closing of its $950-million second fund in 2013.
According to Arpels of IndEU Capital, the life of a fund will be seven years with the average investment time in a company being four years. IndEU will invest between $1 million and $8 million in each firm and targets that the first fund will cover 12-14 companies.
"Our focus is to invest in made-in-India lifestyle to luxury companies that target the mid-to-luxury segment with an enterprise value of not more than $20 million. While our focus is to invest in companies that have Indian roots, we would not be looking at ethnic brands that do not fit our international rollout strategy. We are also targeting companies that are independent, not backed by family offices or any other PE player," said Arpels.
IndEU has already identified 300 companies catering to segments such as cosmetics, ready-to-wear, couture, interior decoration, e-commerce, spas, jewellery and accessories. Of these, they have short-listed the number firms to tap to 50 and are already in talks with a few for due diligence.
"We would take significant minority shareholding in the companies we would invest in and will have a hands-on relation with them. India has been supporting international brands with its know-how and creativity but very few talk about it. Moreover, there is a lack of professional management in this space. We can bridge this gap as we rely on a team of professionals who have dealt with the luxury market in France, Italy and the US," added Arpels.
Along with this $70-million fund, which is Singapore-based, IndEU is also looking at raising a second fund with domestic investors. "We have received, more recently, significant interest from Indian family offices which would rather invest through an Indian fund which gives them more comfort," he added.