Avigo raises $150m for India

The Delhi-based firm has held a first close for its third private equity fund, which aims to raise $250m by the end of the second quarter.

Avigo Capital, which makes growth capital investments in India, has raised $150 million for the first close of Avigo SME Fund III.

The fund is targeting commitments of $250 million and Achal Ghai, managing partner at Avigo, said that the fund is expected to close by the end of the second quarter this year.

Returning lead investors include the IFC, the private investment arm of the World Bank; UK government-backed fund of funds investor CDC Group; EDC, Canada's export credit agency; Squadron Capital, a Hong Kong-based fund of funds manager; and Australian Reward Investment Alliance, which was represented by Macquarie. New lead investors in the fund include PPM and New York-based fund of funds manager Siguler Guff, Ghai said.

The firm will maintain a similar investment strategy to that of its previous two funds. It will make investments in four core sectors including industrial manufacturing, industrial services, engineering and contracting, and infrastructure-related manufacturing and services, Ghai said. He added that a small amount could also be invested in emerging sectors such as education, specialised retail and rural services.

Avigo SME Fund III will make investments of between $7 million and $10 million per deal, excluding follow-on investments.

The predecessor to this fund was a $125 million vehicle that closed in 2007. That fund is not about 80 percent invested across 11 deals, Ghai said.

The firm’s first fund was launched in 2004 and raised C$14 million ($11 million; € 8.8 million). Five investments were made out of that fund in the manufacturing, auto components and pharmaceutical sectors.
Some of the firm’s portfolio companies include Privi Organics, a manufacturer of aroma chemicals; Spykar, a branded apparel company; Bharat Box Factory, a packaging company; Aeroflex Industries, a stainless steel pipe manufacturer and distributor; and Rinac India, a cooling solutions company.