India Life Sciences Fund, a healthcare and pharmaceuticals-focused private equity fund advised by InvAscent, has raised $250 million for its third growth capital fund, in what could be termed as a sign of increased investor appetite towards sector-specific Indian investment vehicles with credible track record.
InvAscent, famed for its early-stage backing of Gland Pharma and Health Care Global through the first fund Evolvence India Life Sciences Fund, will continue to focus on the same set of sectors and investments.
Investors of the fund include blue chip fund-of-fund vehicles, pension funds and university endowments and family offices from the US and Europe.
“The demand for quality medicines and quality healthcare in India is very strong,” said Hari Buggana, chairman and managing director of InvAscent Investment Advisors. “In addition, globally, there is a demand for high quality and low-cost medicines. And Indian firms are very good at addressing this demand.”
“Our Fund I made eight investments, and has exited all of them successfully, which is quite remarkable in the current circumstances. From the second fund, we began investing in 2013, have made 12 investments and it is fully deployed,” he said.
“The per-investment ticket size would be between $10 million and $50 million. We have already made three commitments from the third fund,” Buggana said.
InvAscent raised its first fund of $100 million in 2006 and a second fund of $150 million in 2014. The company had invested Rs 120 crore in Gland Pharma in 2008 and sold it when US private equity investor KKR invested $200 million (about Rs 1,300 crore) in 2014. The firm has sold its stake in Healthcare Global to Singaporean sovereign fund Temasek. Some of its other investments include medical equipment maker Sutures India and Dr Agarwals’ Eye Hospital.
“From the third fund, we have already committed three investments, including a controlling stake acquisition in Symbiotech along with Motilal Oswal PE, minority transactions in Strides Consumer Health and Intron,” Buggana said.
Pharmaceuticals and healthcare space has been one of the best performing sectors for investment exits, according to McKinsey & Co. The sector had a 213% investment growth between 2015 and 2017 compared to 2009-11 and the median IRR (internal rate of return) stood at 19%, McKinsey said in November 2018.
The year 2018 also witnessed record fundraising activity by India-focused PE/VC funds. “$8.1 billion being raised across 51 PE/VC funds, a 40% increase over 2017 and the highest ever,” EY said in a note on January 14. “Similarly, the fund-raise plans announced stood at $22.3 billion, which again is the highest ever. This further reiterates the underlying trend, reflected in both investments and exits, of India’s improving attractiveness for global PE/VC funds as the domestic PE/VC ecosystem flourishes.”
Source: Economic Times