Baer Capital Plans New PE Fund, To Raise $300 Mn

India-focused Baer Capital Partners expects to raise around $300 million for a second private equity fund and plans its first exit by floating a power distribution company.

With the new deals in the pipeline and almost three-fourths of its first fund Beacon India Private Equity Fund been invested, it is planning to raise this new fund for further investments.

The Dubai-headquartered investment firm, which also operates a hedge fund in India had one of its portfolio companies, A2Z Group, which has sought Indian regulatory approval for an initial public offering that it expects to launch by December. A2Z Group's other investors include high-profile Indian businessman Rakesh Jhunjhunwala and private equity firm Lexington Partners.

Baer Capital's $200 million Beacon India Private Equity Fund has investments in companies ranging from power distribution to coffee chains and online art auction house. It has investments in companies like New Horizon Media Private Limited , Vatika LImited, Impresario Entertainment & Hospitality Private Limited, Bhayana Builders Private Limited and Saffronart Management Corp.

It also has a $150 million special purpose vehicle which it manages with Goldman Sachs in India aimed at tapping real estate opportunities.

Baer Capital also operates a hedge fund in India named Beacon India Alpha Equity Fund, which was launched in August 2008. It primarlity invests in pharmaceutical, cement and information technology (IT) stocks.

India's hedge fund industry is not as developed as other markets in the United States or Europe when it comes to the number of investment tools and strategies available for managers. Typically hedge funds prefer to use sophisticated investment techniques such as arbitrage and option strategies to reduce their risk.

Everstone Capital, the private equity arm of Future Group had also planned to raise $350 Mn for a new fund to invest in warehouses in India. Recently in July, Aditya Parekh-son of HDFC chairman Deepak Parekh, raised $ 750 Mn for Faering Capital fund, which plans to invests in mid-cap firms, with an average deal size of Rs30-80 Cr.

Reference: BS

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