New Silk Route goes slow on fresh investments

Fund to focus on existing investments, pursue new investments 'selectively'

New Silk Route (NSR), a private equity fund with focus on India and a few other Asian markets, has applied brakes on fresh investments, sources said.

According to leading investment bankers who have been interacting with NSR's team in India, NSR has gone "absolutely slow" on fresh investments and is holding on to the resources to make selected follow-on investments. The $1.4-billion fund, which has so far invested around half of its corpus has sounded out the bankers that it will focus heavily on exits of its portfolio companies, as part of its bid to raise a new fund, which industry observers said would be a tough goal to meet.

According to Parag Saxena, co-founder of NSR, the fund will pursue investments selectively. "Our strategy is to invest where our deep operating skills can be utilised. We have raised our return hurdle as the rupee has had a steep fall, and the exchange rate plays a larger role than before. This makes it harder to find attractive investments," said Saxena, who co-founded NSR along with former McKinsey head Rajat Gupta, who was recently indicted for insider-trading in the US.

Saxena told Business Standard: "As we have many investments, our effort is greater in managing existing investments. However, we continue to be engaged in looking for investments that overcome the hurdles mentioned."

Citing regulatory compliance (NSR is a Securities and Exchange Commission-registered investment advisor), Saxena declined to elaborate on NSR's fresh fund raising. He, however, added: "We still have several hundred million dollars to potentially draw from our clients. Hence, we have enough money to consider new investments as well as support existing investments."

The fund, which has invested in Coffee Day Group, Vasudev Adiga's Restaurant, Ascend Telecom Infrastructure (formerly Aster Infrastructure), besides various others, has added that it intends to work towards one of its earlier stated strategy of building a food platform with an investment of $100 million in that segment.

"We have a very active effort going on in fulfilling this strategy. We are hopeful of finding attractive investments which help us build a meaningful platform," Saxena noted.