ValueQuest Enters PE Segment With INR 1,000 Cr Fund, To Invest In Late-Stage Businesses

Public market investor ValueQuest Investment Advisors has entered into the private equity (PE) space with its new fund. The company further plans to raise up to INR 1,000 Cr ($121 Mn) for the new fund.

Through its new fund, ValueQuest Investment Advisors will invest primarily in late-stage opportunities, Mint reported.

The Securities and Exchange Board of India (SEBI) gave approval to VQ Scale Fund, a fund managed by ValueQuest and structured as an India Category II Alternative Investment Fund (AIF), last month.

As per the report, the fund will have a target size of INR 700 Cr. There is also a green shoe option of INR 300 Cr, which would potentially take the total fund size to INR 1,000 Cr.

While Ravi Dharamshi, founder and CIO of ValueQuest Investment Advisors, will sponsor the fund, Dharamshi’s family office will anchor it with an infusion of INR 100 Cr. The fund has also received soft commitments from a few domestic family offices.

The new fund, which has a sector-agnostic approach, is targeting its first close by March-end.

“We are extending our public equity lens and investment framework to private markets as we believe, companies are maturing much faster than before. We feel this is an opportune time to enter the space, especially when companies are finding it tough to raise capital in the private space amidst funding winter,” Dharamshi said as quoted in the report.

The fund will focus on partnering with capital-efficient founders building scale in their businesses, Dharamshi added.

Alternative Investment Fund or AIF is an India established or incorporated, privately pooled investment vehicle that collects funds from sophisticated investors. These investors can be Indian or foreign, and invest in accordance with a defined investment policy for the benefit of its investors.

Different kinds of funds including real estate, private equity funds, funds for distressed assets, are registered as Category II AIFs, among others.

Recently, HDFC Mutual Fund introduced its first alternative investment fund (AIF) – HDFC Select AIF FOF– I, to mark its foray into the alternative assets space. The Category II AIF will invest in venture capital (VC) and private equity (PE) AIFs reportedly.

According to SEBI, fund managers for AIFs raised INR 6.41 Lakh Cr across categories till the end of June 2022.