The International Finance Corporation (IFC), the private investment arm of the World Bank, is proposing an equity investment of up to $15 million in India-based PE fund Faering Capital Evolving Fund III Limited.
In a post-investment disclosure, the IFC said it will take part in the fundraising of Faering Capital, which seeks to secure $200 million, by investing $15 million in the fund.
Faering Capital Evolving Fund III is focused on providing growth capital to mid-market companies in India, spanning sectors such as financial services, consumer products and services, healthcare, logistics, and other consumption enabling sectors.
The fund will be managed by Faering Capital International, which manages Faering Capital India Evolving Fund I, a 2010 vintage $145-million fund.
“The fund will provide scarce and patient capital as well as expertise and guidance to support value creation,” the IFC said.
The IFC added that the fund will support the Indian PE industry “at a time when broader investor participation has waned”, through the support of local PE firm with long-term potential, operating in a segment of the market that has few growth capital managers.
“Recently, fundraising for India’s PE market has been difficult – the sector is at a critical inflection point, and investors look to experienced investors with global reach such as IFC to assess the market opportunity,” it said.
The IFC is one of India’s most influential PE fund investors, with $707 million committed to 34 funds since 2000.