Avendus Private Equity

Funds managed

Fund nameAsset ClassLicense
Zodius Growth FundPE- Growth stageSEBI AIF Cat 2
Future Leaders FundPE- Late stageSEBI AIF Cat 2
Avendus Structured Credit Fund 1Private Debt-Close ended investment fundSEBI AIF Cat 2
Avendus India Opportunities FundHedge Fund-PIPESEBI AIF Cat 2

About the AMC

Established in 1999 in Mumbai, India, Avendus’s presence in eleven cities across four countries brings global perspectives.

Avendus Capital Pvt. Ltd, operates through four of its arms: Avendus Capital Pvt. Ltd (M&As, structured finance, equity capital markets, financial sponsors group, private equity syndication), Avendus Wealth Management Pvt. Ltd, Avendus Capital (UK) Pvt. Ltd and Avendus Capital Inc. (US).

KKR, formerly Kohlberg Kravis Roberts and Co., has bought about 58% from 13 investors led by Eastgate Capital Group (ECG), which alone holds about a 26% stake in Avendus.

US-based private equity firm KKR and Co. Lp has acquired a majority stake in Avendus Group from existing investors, paying $115-120 million.

The remaining 42% is held by founders Ranu Vohra, Gaurav Deepak and Kaushal Aggarwal.

At the price paid for the 58% stake, the enterprise value of Avendus comes to $200 million.(https://www.livemint.com/Industry/DI6dyKXHxZPKd5X3C0yTUM/KKR-acquires-majority-stake-in-Avendus-for-about-115-millio.html)

Key staff

  • Zodius Growth Fund – Fund Manager

Shilpa Kulkarni is on the Board of Zivame, Freshmenu, Culture Machine and Allygrow Technologies. Shilpa was part of the founding team at WNS and has played senior management roles during her stint with the firm. Prior to WNS, she was a venture investor at eVentures India where her investments included Mentorix (sold to Lionbridge) and Intigma (sold to Emptoris). Shilpa began her career as an investment banker with JP Morgan Chase in New York. Shilpa holds an MBA degree from Fuqua School of Management, Duke University (USA).

  • Future Leaders Fund – Fund Managers

Ritesh Chandra

Ritesh has over 22 years of deal making experience, of which last 10 years were spent leading the consumer and financial services investment banking practice at Avendus. He is based in Mumbai. Prior to joining Avendus, he had worked with companies like Credit Suisse, Ernst and Young and Andersen. Ritesh holds an MBA  degree from the Faculty of Management Studies(FMS), New Delhi and a Bachelor of Engineering degree from the University of Delhi.

Vivek Singla

Vivek has over 13 years of investment experience, of which the last 10 years were spent consummating consumer deals in the consumer and the financial services sector. He is based in Mumbai. Prior to joining Avendus, he worked with companies like CLSA, Kotak Mahindra Bank and Standard Chartered Bank. Vivek holds an MBA degree from Indian Institute of Management Lucknow and a Bachelor of Technology degree from Indian Institute of Technology Delhi. He is also a CFA charterholder.

Investment Philosophy (for firm)

Zodius Growth Fund

We partner with proven entrepreneurs and managers to build disruptive and market defining, India-centric businesses that have the promise of creating entirely new markets as well as generating exceptional returns. In the early days of an investment, we spend considerable time on sharpening the strategy and getting key operational drivers in place. We believe that vision without execution is often meaningless and our business leadership and investment experience provides us with tools and insights to help our portfolio companies focus sharply on high performance execution to back their ambitious vision.

Type of companies

Primarily, unlisted Indian companies which are at growth stage.

Sector focus

Digital businesses covering both internet and mobile and in areas such as media, commerce and consumer services

Business services, particularly Social, Mobile, Analytics and Cloud (SMAC) driven IT/BPO opportunities to build new disrupters or restructure and redirect existing companies toward new opportunities.

Fund Leaders Fund

The Fund will seek to create value for its investors by investing opportunistically in late stage, mid-market, private companies. 

FLF will pursue a unique and differentiated strategy by focusing primarily on proprietary situations and situations where traditional investment firms are constrained due to various reasons including deal timelines, investment rights, ticket sizes etc.  The Fund aims to craft investment opportunities by leveraging the extensive network, relationships and knowledge base of the Sponsor, Avendus Capital. The Fund aims to provide a quick and flexible pool of capital to business owners, companies and their stakeholders.

Some indicative situations wherein the Fund can evaluate transactions:

a. Business owners seeking to provide liquidity to employees holding ESOPs

b. Existing investors unable to subscribe to their entitlement of rights issues in companies

c. Existing investors looking for a part exit from their investments, but the company is unwilling/unable to run a formal process

d. Company seeking a quick bridge round before the next ‘big’ round

e. Company seeking primary capital to pursue acquisitions

Target Sectors:

Consumer (traditional and new age) and financial services.

Investment Size:

INR 50-100 crore per transaction, minority stake

Avendus Structured Credit Fund 1

Avendus Structured Credit Fund 1 (Fund) is a Category II close ended investment fund. The Fund has a target size of INR 250 crore with a greenshoe option of INR 250 crore.

The Fund invests in structured credit financing transactions yielding medium to high teen returns and also evaluates participating in equity upside. Investment strategy of the fund, led by Sandeep Thapliyal, is focused on mid-tier corporates and is sector agnostic except for a few sectors such as infrastructure and real estate. By leveraging on the firm’s established advisory and structured finance franchise, the Fund invests in attractive investment opportunities in its chosen market segment.

In addition to being the sponsor, Avendus group demonstrates significant commitment to this Fund by participating to the extent of at least 20% in each transaction through its Non Banking Financial Company (NBFC), Avendus Finance Private Limited (AFPL). This investment vehicle leverages the expertise of AFPL’s investment professionals and draws operating efficiencies from its due diligence and risk management practices. It thus offers superior returns to investors, by providing opportunities to the fund to co-invest along with the NBFC in high-quality mid-size companies in niche and high growth sectors requiring complex structured financing.

Media

Title: This lady proves private equity isn’t just a men’s game, Source: ET article, Date: 08 March 2019

https://economictimes.indiatimes.com/markets/stocks/news/this-lady-proves-private-equity-isnt-just-a-mens-game/videoshow/68318043.cms

Shilpa Kulkarni gives her insight on the following,

Opportunity in PE sector:

India is a high growth market from a macro perspective, we anticipate for the next decade or two that the growth will continue. Sectors that we invest in we expect almost $800 billion of value creation over the next 6 years. From PE perspective we have almost more than $100 billion than we can deploy in this sector.

Fewer women in the financial world:

Women inherently face challenges on work-life balance and in the financial world there are unfortunately fewer mentors and role models women can look upto but hopefully this will change soon.

Message for women entrepreneurs:

  1. Don’t be intimidated by what you do not know, be very open to making mistakes.
  2. Never underestimate the power of your instincts.
  3. If you want something badly, be ready to fight for it.

Title: Betting on consumption and finance sectors: Ritesh Chandra, Source: ET now video, Date: 03 June 2019

https://www.timesnownews.com/videos/et-now/exclusive/betting-on-consumption-finance-ritesh-chandra-to-et-now/33412

Within the consumer space we are very bullish on the food and apparel industry. He thinks these are the segments where most of the spending of Indian individuals take place. As per capita income is increasing, spending is increasing and with e-commerce availability is no more a problem. There is a shift from unbranded to branded products and this trend is likely to continue over time.The genesis of fund leaders fund is buying minority stake in late stage market leading companies. Parameters they look at are very traditional like ROCE, ROE very closely. They are very focused on growth and especially profitable growth.

Title: Avendus Fund acquires a stake in Bikaji Foods, Source: Livemint Article, Date: 27 May 2019

https://www.livemint.com/companies/news/avendus-future-leaders-fund-buys-minority-stake-in-bikaji-foods-1558954924222.html

Avendus FLF bought the stake from private equity firm Lighthouse and investment banking firm Intensive Softshare. Avendus FLF, a category 2 alternative investment fund (AIF), focuses on tactical opportunities in market leading, late stage private companies in the consumer and financial services segments.

The fund is looking to raise a total corpus of ₹500 crore from individual and institutional investors. During its life cycle, the fund plans to invest in eight to ten companies with an average investment size of ₹40-75 crore.

Analyst questions

  • You(Ritesh Chandra) said you look at parameters like ROCE and ROE before investing into a company, everyone in the industry looks at the same. What parameters make you go from  looking at the company to investing into the company?
  • You(Shilpa Kulkarni) said that the sectors you invest in are expected to create value of around $800 billion in the next few years in one of your interviews,on what basis do you say so?
  • What changes do you expect to see in the private equity segment over the next decade?
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