The Hindu Business Line : JM Financial launches private equity fund

JM Financial Group has launched JM Financial India Fund, a corporate private equity fund, with the US-based Old Lane Partners, the lead investor/co-sponsor to the fund.

The fund has raised an initial corpus of Rs 415 crore after its first close on July 31. The money has largely been raised from foreign investors with only 20 per cent from domestic investors. The fund will re-open in September for investment.

It will invest in growth-oriented, largely unlisted companies with a size of Rs 500-1,000 crore. "The interesting sectors for investment would be retail, financial services, business process outsourcing and auto ancillaries," said Mr Vishal Kampani, Director, JM Financial Group.

The fund has entered into a deal to invest in Genesis Colour, a high-end retail company. The minimum corpus for investment in a company would be Rs 25 crore and the maximum is Rs 150 crore.

"The launch of our private equity fund is in line with our expansion plans for the group. The fund is JM Financial Group's first private equity fund. The India growth story and strong emerging companies backed by new age entrepreneurs offer tremendous opportunity for JM Financial Group to invest in private equity capital in building businesses," said Mr Nimesh Kampani, Chairman, JM Financial Group.

There is no exit load for the fund as it is a long-term, high risk, high return fund and the group expects around 25 per cent return on the fund over the period.

Expansion plans

JM Financial Group is looking at expansion plans apart from raising equity funds. "We were viewed as a financial advisory company before, but we have now laid our focus on alternate investments including IPO funding, margin funding, providing loans to investors, asset backed securities and investments, and real estate funds," said Mr Vishal Kampani, Head of Corporate Finance.

"We are contemplating on foraying into the fixed income segment as well. The focus will be institutional and capital market driven," he added.

The group has also planned to launch a real-estate fund, which is expected to open next week. It plans to raise around $150 million. Again, majority of the fund will be raised from foreign investors while 25 per cent will be raised from domestic investors, said Mr Vishal Kampani.