Manish Kejriwal's Kedaara Capital closes maiden fund at $540 mn

World's leading pension, sovereign funds such as Canada's OTPP and ADIA have invested in Kedaara

At a time when Indian private equity (PE) space is getting out of global  investors' radar as far as new fund-raisings are concerned, Manish Kejriwal, former India head of Temasek Holdings, has closed his maiden fund with a corpus of $540 million (Rs 3,200 crore) through his Kedaara Capital.

As reported by Business Standard, world's leading pension and sovereign funds such as Canada’s Ontario Teachers’ Pension Plan (OTPP) and Abu Dhabi Investment Authority (ADIA) have invested in Kedaara.

OTPP is Canada’s third-largest pension fund, with $115 billion (C$117 billion) in assets, while ADIA has an estimated value of $750 billion and ranks among the largest wealth funds in the world.

Kedaara Capital, set up by Kejriwal, Sunish Sharma (former managing director of General Atlantic India) and Nishant Sharma in October 2011, had roped in UK-based PE firm Clayton, Dubilier and Rice (CD&R).

Though it has raised $540 million, Kedaara has an option of additional investments of $500 million as the LPs have agreed to make co-investments in Kedaara’s proposed investments in India.

Due to interest from family business houses and domestic institutions, Kedaara is likely to add Rs 250-300 crore to the current fund.

Manish Kejriwal, managing partner of Kedaara Capital, said, "In addition to normal minority investments, we differentiate ourselves by our ability to take control of our investments. On control side, we are seeing a lot of interest not only from family conglomerates, but also from first generation entrepreneurs facing succession issues as well as MNCs looking to divest their India portfolio."

To nurture its future investments in consumer and technologies, Kedaara Capital has roped in Pramod Bhasin (ex-CEO, Genpact), Sanjeev Aga (ex-CEO, Idea Cellular) and Vindi Banga (ex-CEO, Hindustan Unilever) as operating partners.

They are supposed to join in the role of executive chairman in the control investments that Kedaara Capital will make. According to Kejriwal, the fund has been working on a number of exclusive deals, while there is no rush to deploy capital.

During his tenure with Temasek, Kejriwal who was married to Rahul Bajaj’s daughter - Sunaina, made investments such as 10 per cent stake buyout in ICICI Bank, one-billion dollar deal to acquire five per cent in Bharti Airtel and also a five per cent stake buyout in Mahindra & Mahindra, which was sold in 2011 with 5X return. Under Sharma’s tenure, General Atlantic made a significant return of about 4.5X in its investment in Genpact.

However, the scene of fundraising by India-dedicated PE funds remains bleak for the last couple of years. The decrease in the number of exits from portfolio companies has had an undeniable impact on fund-raising. “LPs are growing impatient, the pressure is mounting on PE funds to make profitable exits and the net effect is that general enthusiasm towards India as an investment destination has waned,” said the recent Bain & Co report.

Limited partners (LPs or investors) are more cautious on allocating funds in India. In 2012, there were 55 funds with a mandate to invest in India, but the total fund value allocated was only around $3 billion, down from $7 billion in 2011, the report said.