Yes Bank plans three funds in 18-24 months

Yes Bank intends to launch three private equity (PE) funds over the next 18-24 months — a $300 million Clean Energy fund, a $500 million Infrastructure fund and a $75 million Social Enterprises fund. A real estate fund could be added later.

The bank has already partnered with Global Environment Fund to launch the first fund. The other two funds will be launched once the Clean Energy Fund is closed by the end of this year.

A top Yes Bank executive told Business Standard that the bank is actively scouting for a compatible private equity management company in the US and West Asia for setting up the infrastructure fund.

The fund would focus on investments in about 25 companies and projects in the infrastructure sector. It will invest around $15 million in each company by raising money from eight to 10 large institutional investors.

“The minimum ticket size of the infrastructure fund will be $5 million. Some of the large institutional investors, such as insurance companies and pension funds have shown an interest in our infrastructure fund”, Yes Bank’s President (corporate finance and development banking), Somak Ghosh said.

The Clean Energy Fund, with a decay period of 10-12 years, would invest in companies engaged in energy efficiency, waste and water management and other related areas. Investors will have to invest a minimum $2 million.

The fund will manage 12-15 investments in the energy sector, with an average investment of about $9 million in each company or project.

The bank will own 35 per cent in the clean energy fund, with the Global Environment Fund holding the remaining 65 per cent.

Power and automation technologies company ABB has reportedly confirmed an investment of about $20 million in the Clean Energy fund.