Monday, June 18, 2007

Citigroup Venture Capital to invest a fresh $1.5 bn in India

Citigroup Venture Capital International (CVCI), Citi’s emerging markets private equity investment arm, will invest a fresh $1.5 billion in India over the next three years, reported the Mint. It will be the largest such infusion by a single private equity investor in the Indian market and outstrips the $1 billion allocations made by the Blackstone Group and Carlyle Group each in 2005.

The investments will be made out of CVCI’s global $4.5 billion Growth Partnership LP Fund II, which is slated to complete fund-raising in a few weeks. In three years, CVCI’s exposure to India will jump three-fold from the $500 million it has invested here so far.

The move to up the ante in India follows the recent reorganization of Citi’s global alternative assets businesses, namely hedge funds, private equity and real estate development, under Citi Alternative Investments (CAI), led by former Morgan Stanley executive Vikram Pandit.

CVCI stepped up its investments in India in 2005 soon after the launch of its $1.7 billion Growth Partnership LP Fund I. This fund, incidentally, was the first independent PE fund that CVCI raised since it started operations as a private equity investor in 1996. The bulk of the $500 million it has invested in India so far came from Fund I. Investments prior to 2005 were made mostly out of proprietary funds from Citi.

Among its notable investments pre-2005 were I-Flex Solutions Ltd in Mumbai, Progeon Ltd (now known as Infosys BPO) in Bangalore and Polaris Software Lab Ltd in Chennai.From the new fund, it will go after deals in cross-border outsourcing, consumer-driven industries, infrastructure and restructuring plays among others.

1 comment:

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