TVS Capital Funds Private Limited has completed the first close of the TVS Shriram Growth Fund 3, a private equity fund. The fund has raised Rs 8.32 billion of commitments entirely from domestic investors, against the targeted Rs 7 billion for its first close. The fund is targeting a total size of around Rs 10-12 billion.
The fund has received enthusiastic participation, especially from family office clients who have invested Rs 100 million or more. Average size of commitments from all clients were around Rs 70 million with the Sponsor group investing over Rs 2 billion.
Srinivasan said that the strong interest from family offices was because of the co-investment programme, which entitles the Family Offices to invest directly into companies, alongside the Fund. Family offices have indicated an interest to co-invest Rs 4 billion, in addition to the Rs 8.32 billion raised as commitments to the Fund itself. The fund is in final stage of issuing its first term sheet and is expecting to make the first investment by the end of the year.
The fund is targeting a final close at around Rs 12 billion. While it is expecting to receive additional commitments of Rs 2 billion from its existing pipeline of clients, it will continue to be open and solicit investments from new clients as well, he added.
Like the Fund-II the focus would be financial services, food services and lifestyle. The sweet spot would be Rs 1-1.5 billion.
TVS Capital Funds second fund of Rs 6 billion has performed strongly, tracking a very healthy investor IRR. For example, RBL return was around 4X, Wonderla around three times and Nykaa around five times.
With this successful first-close, the total capital raised by the Fund from domestic investors across its funds has exceeded Rs 20 billion.