$700 mn buyout deal exhibits new approach of transferring property, holding fairness in India | Information on Markets

ChrysCapital Administration Co. just lately used a so-called continuation fund to boost $700 million from buyers to keep up its minority stake in Nationwide Inventory Change of India Ltd. This comparatively new portfolio administration device permits non-public fairness managers to maneuver property round extra simply, as a strategy to maintain them for longer. 

ChrysCapital’s transaction, one of many largest on Asia’s secondary market, helps set the stage for personal fairness funds in India to have an alternative choice for his or her funding stakes, Kunal Shroff, managing accomplice on the India-focused agency, mentioned in an interview.

A agency can elevate a continuation fund to maneuver an asset or a number of property from prior funds and permit buyers within the authentic funds to both roll over their commitments into the brand new car and generally add new capital, or to money out and take liquidity.

The success of this continuation fund is “a optimistic sign to buyers that India can get you liquidity — not simply from block trades of a billion {dollars} that a few of our friends have performed, or by way of gross sales to different PE funds or methods,” mentioned Shroff, who’s been on the agency since 1999.

Single or multi-asset continuation funds have gained extra traction within the US and Europe. They made up 76 per cent of the non-public fairness deal stream globally final 12 months, in accordance with a report by Evercore Inc. These so-called sponsor-led transactions accounted for lower than half of the $114 billion secondary market deal volumes, the report mentioned. 

These transactions are nonetheless uncommon in Asia nonetheless. 

ChrysCapital’s fundraise to hold on to its 4 per cent stake in NSE was greater than double its authentic goal, Shroff mentioned. It additionally rolled over all its share of income, or carried curiosity, on the deal into the brand new fund, reflecting its “pores and skin within the recreation,” he added.

The newest deal values privately-held NSE at between $17 billion and $18 billion and the agency nonetheless has plenty of runway for development, Shroff mentioned. Plans for taking the corporate public, a transfer that’s been within the works for years, should not but firmed up, he mentioned. 

HarbourVest Companions LLC, LGT Capital Companions AG and Pantheon Ventures Ltd got here into the continuation fund as new buyers, and UBS Group AG was an adviser to the deal. 

ChrysCapital has greater than $5 billion of property below administration and has returned $6.5 billion to buyers by way of greater than 70 exits, in accordance with its web site. 

First Revealed: Could 15 2024 | 2:09 PM IST