Aureos Capital Targets $200M India Fund

Emerging markets private equity firm Aureos Capital is launching a $200 million India fund for investments in small and medium-sized businesses, Reuters reported over the weekend. The fund, Aureos India Fund II, will invest across India, Sri Lanka and Bangladesh.

(Reuters) – Aureos Capital, a specialist emerging markets private equity fund, is launching a new $200 million India fund to invest in small and medium sized (SME) companies in tier 2 cities in India, Sri Lanka and Bangladesh, the company said in a statement.

The Aureos India Fund II will target cities in India with populations of less than 4 million, such as Ahmedabad, Surat, Coimbatore, Chandigarh, Madurai, Kochi and Bhopal.

“Traditionally, private equity firms in India have chased the same limited number of opportunities in cities like Bangalore and Mumbai,” Sev Vettivetpillai, chief executive of Aureos said. “By looking beyond that, Aureos will be able to access strong companies at valuations below the rest of the market,” he added.

By 2030, 590 million people will live in India’s cities, accounting for 70 percent of the country’s GDP and creating demand for new infrastructure and professional services, Aureos said, citing a McKinsey research report.

India was the busiest private equity-backed M&A market in Asia in the first-half, with 61 deals worth $3.3 billion, according to Thomson Reuters data.

Total private equity-backed M&A activity in Asia in this period soared 79 percent to $18.1 billion from a year ago. China accounted for 20 percent of the activity, with 45 deals worth $3.7 billion.

Aureos Capital’s first South Asia Fund completed nine investments with an average investment size of $8 million. It invests in SMEs in sectors such as clinical research, logistics, telecom solutions, solar technology, green energy and healthcare.

(Editing by Jacqueline Wong)