ValueQuest Investment Advisors, a public market investor based in India, has launched a new private equity fund and plans to raise up to INR 1,000 Cr ($121 Mn) for it. The fund, called VQ Scale Fund, is structured as an India Category II Alternative Investment Fund (AIF) and will invest primarily in late-stage opportunities.
The fund has a target size of INR 700 Cr, with a green shoe option of INR 300 Cr. Founder and CIO of ValueQuest Investment Advisors, Ravi Dharamshi, will sponsor the fund, while 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.
ValueQuest Investment Advisors is launching a new fund that will extend its public equity investment framework to the private markets. The fund aims to target companies that are maturing faster than before, providing an opportune time to enter the private equity space. This is especially relevant as companies struggle to raise capital in the private space amidst funding constraints. The fund will be sector-agnostic and will focus on partnering with capital-efficient founders who are building scale in their businesses.
A freshly introduced investment fund is set to be categorized as a Category II Alternative Investment Fund (AIF) in India. An AIF is a type of privately pooled investment that aggregates funds from sophisticated investors, both Indian and foreign. These funds are subsequently allocated based on a pre-defined investment policy that aims to maximize gains for the investors. Various types of funds, such as those focused on real estate, private equity, and distressed assets, can be registered as Category II AIFs.
ValueQuest’s investment approach in the private markets will mirror their public equity lens and investment framework. The fund’s goal is to find capital-efficient founders who are building companies that are scaling quickly. With a sector-agnostic approach, ValueQuest is looking to invest in a range of businesses across various industries.
HDFC Mutual Fund has entered the alternative investment fund (AIF) space with the launch of its first AIF, called HDFC Select AIF FOF-I. This Category II AIF will primarily invest in venture capital (VC) and private equity (PE) AIFs. The move comes as AIFs continue to grow in popularity, with fund managers raising a total of INR 6.41 Lakh Cr across categories by the end of June 2022, according to SEBI.
Alternative Investment Funds (AIFs) are financial instruments that amalgamate wealth from affluent individuals and institutional investors to allocate in assets that are typically not accessible in public markets. Such assets consist of but are not confined to, real estate, private equity, hedge funds, and commodities. AIFs proffer investors an avenue to broaden their investment portfolios and potentially earn higher returns compared to traditional investments.
HDFC’s ingress into the Alternative Investment Fund (AIF) arena is anticipated to allure potential stakeholders seeking involvement in the private equity and venture capital territory.
The AIF is poised to provide investors with the means to acquire an array of VC and PE AIFs that are well-diversified and deftly managed by adroit fund managers. This maneuver also exemplifies HDFC’s extensive strategy to augment its product offerings and capitalize on uncharted investment prospects.