Lighthouse plans third mid-market private equity fund

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Lighthouse Funds is planning to float its third mid-market private equity fund, joining a host of investment firms that are out to raise capital through new offerings.

The India-dedicated PE firm is targeting a corpus of $200 million for the third fund, said Nitya Khemlani, its investor relations head. It had raised $100 million for its first fund and $135 million for the second.

Lighthouse follows firms such as Baring PE India, ICICI Venture, IDFC Alternatives and ChrysCapital that are either on the road to mobilise fresh capital or have done so over the past few months.

Baring PE India is raising its fourth fund while IDFC Alternatives has hit the first close of its new fund.

ICICI Venture has mopped up a bulk of its targeted corpus under a new sector-agnostic fund and ChrysCapital closed fundraising for its seventh fund at a tad above its target of $600 million.

A few mid-market PE funds are also floating new funds. Ascent Capital is aiming to raise up to $400 million while Amicus Capital Partners marked the first close for its maiden fund late last year.

Lighthouse’s plan for a new fund was first reported by Mint, citing co-founder Mukund Krishnaswami. He also told the newspaper that Lighthouse returned 1.7 times of the invested capital on its first fund, with four more exits to go.

The PE firm recently exited cookie maker Unibic India Pvt. Ltd by selling its stake to Peepul Capital.

Earlier, it had sold its stake in Surakhsha Diagnostics to healthcare-focussed fund Orbimed Advisors.

Lighthouse made six investments from its second fund. These include apparel maker Fabindia and non-banking finance company Capital Trust Ltd. It had invested $10-20 million in Fabindia in November 2016, in a round led by PremjiInvest.

The US-based Lighthouse was set up in 2001 by Krishnaswamy, a former executive at Lehman Brothers’ private equity unit, and W. Sean Sovak. It has been investing in India since 2006. It has Sachin Bhartiya as a partner and Brian Larcombe as an adviser. Larcombe is the former global CEO of UK-based PE fund 3i Group.

*This article has been updated to include comments from a Lighthouse executive.

(As published in vccircle on Wed, Apr 19 2017)