Samara Capital plans to launch $550-million fund by year end

Samara plans to use 70% of the proposed fund for buyout or control transactions while the remaining will be used for acquiring significant minority stakes, said one of the persons aware of the development.

Home-grown private equity major Samara Capital plans to launch a $550-million fund by the end of this year, two people aware of the development said.

Samara, which has already raised two funds worth around $700 million since its launch in 2007, plans to use 70% of the proposed fund for buyout or control transactions while the remaining will be used for acquiring significant minority stakes, said the first person.

Samara has already started negotiations with its existing limited partners (LPs or investors), including International Finance Corporation and UK government-owned CDC, university endowments, sovereign wealth funds, fund of funds in the US, Canada, Europe, Middle East and Asia.

“Once the existing LPs commitment offers fall in, we expect to do the the formal launch. We expect the fund raise to get completed within next 18 months,” said one of the sources mentioned above.

“Samara plans to do 2-3 more deals with the remaining 30% of the second fund before December quarter and the third fund will be launched simultaneously,” he added.

Previously, Samara had raised two funds — fund I of $260 million and fund II of $400 million with a large co-investment pool.

The fund’s core theme would be the increasing consumer discretionary spending and the core idea is to focus on companies and assets, which cater to the core Indian economy.

“The base line of the fund is bullish on India. We are not much concentrating on firms that have more to do with outside markets and are prey to global economic downturns,” one of the persons said.


The fund, co-founded by former Citi Group executives Sumeet Narang and Gautam Gode, has already deployed more than 70% from its existing second fund. Samara’s investee companies include Flemingo Duty Free, TVC Sky Shopping, Ganga Kaveri Seeds, Asian Oilfield, Sahajanand Medical Technologies, Monte Carlo Fashions, Guardian GNC, Paradise Foods and Sapphire Foods.

Though the fund looks more to controlled transactions from its third and the biggest fund, Samara has gained most of its glory from minority positions. Some of its best exits include a near five times return from RBL Bank and a near four times return from Sharekhan, when the brokerage got acquired by BNP Paribas.

A spokesperson from Samara declined comment.

“Globally, India is amongst the top-ranked emerging markets for large LPs to give money to GPs (general partners or fund managers) to manage,” said Vivek Soni, partner & leader of private equity advisory at EY India. “This optimism is driven by several factors such as large-scale PE exits, which have crossed $26 billion over the last three years, which is a sign of the evolving maturity of the PE industry; the depth of Indian entrepreneurial talent and the reformist attitude of the government."

Samara's third fund would be one of the largest funds launched by a domestic PE fund in recent time.




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