Private equity firms set to raise $2 billion till June

After a lacklustre 2009, when private equity (PE) fund raising was low, India-focused PE funds are set to raise nearly $2 billion in the first half of 2010. UTI Ventures, Multiples, floated by Renuka Ramnath, ex-CitiVenture Ajay Relan’s CX Partners and Everstone Partners are close to raising nearly $2 billion overall.

Industry sources said Ramnath had raised nearly $300 million of the targeted $450 million while UTI Ventures was set to close a $350-million fund.

“Ajay Relan, who led Citigroup’s venture arm for a long time, is raising $400 million and is understood to have managed his first closure of $225 million. Everstone Capital, a spinoff from Future Group, is on track to raise nearly $300 million,” a source in the know told Business Standard.

While all these are on the way to wrap up their funds, ICICI Ventures and Aditya Birla PE recently announced that they had raised $250 million and $150 million, respectively. Their targets are $400 million and $200 million, respectively.

Ajay Srinivasan, chief executive, financial services, Aditya Birla Group, said the PE’s maiden fund had been received well by domestic high net worth clients and institutional investors and had commitments of over Rs 675 crore despite an uncertain market environment. “In view of the continued patronage of investors, the fund will accept applications for a limited period and will announce its second and final closing shortly,” he added.

This is a marked difference from 2009, when the only notable fund-raising was by India Value Fund, which closed a $700-million fund. “There is an increased interest in seasoned PE funds from global limited partners. The consumption story in India is still attractive for them and funds such as UTI Ventures and ICICI Ventures that have a proven track record are able to beat the recession. We also understand that a couple of these funds have been oversubscribed and are faced with a dilemma of having to say no to a few limited partners,” said an industry source.