Lazard gets govt nod for India private equity fund

The government today cleared foreign fund house Lazard's proposal to invest Rs 125 crore in its Lazard India Growth Fund, which will focus on mid-sized firms in the country.

Lazard India Growth Fund (LIGF) will be registered with market regulator SEBI as a venture capital fund and the LIGF Trust plans to invest heavily in the mid-market companies, stopping just short of acquiring controlling stakes, official sources said.

The fund's focus will be on infrastructure, outsourcing and consumer driven companies, apart from other growth sector areas. However, the fund will not undertake investments in the real estate sector, sources informed.

With its investment, the international financial advisory and asset management firm Lazard Group's investment holding company Lazard Mauritius will hold about 25 per cent of the equity shareholding in the fund.

Further, Lazard plans to incorporate a new company in India, Lazard India Advisors Pvt Ltd (LIAPL), which will manage the LIGF fund under an agreement to be executed between the fund trustee and LIAPL.

LIAPL, sources said, will approach IL&FS Trustee Co Ltd (IL&FS) to appoint it as the trustee to the fund, of which 75 per cent of the issued and paid up equity share capital will be held together by Indian investors and LIAPL.

Meanwhile, the government also approved US-based Lazard Group's proposal to invest, directly or through its subsidiaries up to 51 per cent (Rs 25 lakh) in the paid up capital of LIAPL.

LIAPL will be registered with the Securities and Exchange Board of India as a venture capital fund and will engage in asset management and investment advisory businesses, officials said.