New Delhi, Oct. 29 -- Niten Malhan, a former India co-head at private equity giant Warburg Pincus, has raised a second fund under the banner of his PE-style investment firm that he floated about six years ago.
Malhan, who quit Warburg in 2018 after working with the US-based PE firm for 16 years and set up his own outfit thereafter, hit the final close of the new fund under New Mark Capital in September, he told VCCircle.
New Mark Capital, a PE-style firm that makes public market investments, floated the fund in July last year. It wrapped up the fundraising process after garnering approximately Rs 1,000 crore ($119 million), Malhan said.
The new vehicle is registered with the Securities and Exchange Board of India as a Category-III alternative investment fund. Under SEBI norms, Category-III includes PIPE funds, which refers to funds that make private equity investments in public equities.
Mahlan, who oversaw Warburg Pincus deals in India including those with Lemon Tree and Alliance Tyres, started New Mark to make long-term investments in mostly small and mid-sized publicly listed companies.
He said New Mark Capital will look at investing in 15-20 companies from the second fund. The investments will have an outlook of around 10 years and that the ticket size will range from Rs 30 crore to Rs 100 crore.
"We will typically have a portfolio where the bulk of the value will reside in 15 to 20 companies. So, these will be larger weights than typical public markets and mutual funds," he said.
"If we give it a couple of years at least, we hope that it gives the portfolio a little bit of a chance to mature over that four-year period," Malhan said, explaining that the fund will have a lock-in period of two years after the initial drawdown of two years.
New Mark Capital's first fund was launched in 2019 and had an initial corpus of around Rs 265 crore, including investments from Malhan himself and a few other individuals. The maiden fund has now tripled in value with an internal rate of return of 28% as of September 30, Malhan said.
"Fund 1 is fully deployed. It was a smaller pool," Malhan said.
The first fund invested in Equitas Small Finance Bank, Aavas Financiers, stationary company Flair Writing, Janus Life Sciences, dairy processing firm Dodla Dairy, and logistics firm Transport Corp of India. It also has a handful of large-cap banking companies in its portfolio.
The second fund counts high-net-worth individuals and family offices as limited partners, Malhan said, without disclosing their names.
He said that the new fund has re-invested in some of the companies that are part of the first vehicle's portfolio. "About one-third of the second fund is deployed, and one-third is due to be drawn down and deployed over the next couple of years," he added.
Published by HT Digital Content Services with permission from VC Circle.