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Consumer-focused, mid-market private equity (PE) firm said on Tuesday that it has closed its third fund, Lighthouse India Fund III, at $230 million ( ₹1600 crore), taking its assets under management to about $500 million.

Investors in Fund III include global institutions such as ,International Finance Corporation (IFC), the UK’s , and German investment group DEG, as well as a number of large global endowments, pension funds and family offices.

Mint reported on December 13 last year that CDC Group plc, a development finance institution owned by the UK government, invested $25 million in the fund. Further, in December 2017 the PE firm had said that the third fund had received commitments of $20 million from International Finance Corp (IFC), the private investment arm of the World Bank group. It had achieved its first close at $150 million in March last year.

IFC AMC, its asset management unit, was also considering a parallel investment of up to $25 million in the fund, which would have taken the investor’s total commitment to the third Lighthouse fund to $45 million, the PE firm had said last year.

Lighthouse has backed several marquee brands such as ethnic snack food maker Bikaji Foods, premium ayurvedic personal care brand Kama Ayurveda, ethnic lifestyle brand FabIndia and leading sanitary ware brand Cera. Its other portfolio companies include laminates maker Stylam Industries, quick service restaurant chain Wow! Momo and value retailer V2 Retail.

Lighthouse plans to invest ₹50-300 crore in the new fund and aims to assist companies with operational enhancement, marketing and sales optimization, M&A, and human capital enhancement.

The third fund has already made four investments. Mint had reported on 5 December 2018, that it had acquired a minority stake in Aqualite for ₹250 crore.

Lighthouse had raised $100 million for its first fund in 2009, followed by a $135 million second fund. It has invested in 17 companies since then. Lighthouse closed its second fund in 2015 at $135 million, receiving a $42 million investment commitment from the US government’s development finance institution, Overseas Private Investment Corp.

“We’ve built an expertise around consumer brands and we don’t plan to change that strategy. But that being said, we would evolve as the market evolves and also look to back companies such as a Kama Ayurveda or Nykaa, which while different from traditional firms, fit into our strategy," Mukund Krishnaswami, partner, Lighthouse said over the phone.

Another private equity fund, JM Financial Ltd is set to hit the final close of its ₹600 crore second private equity (PE) fund, Mint had reported on 29 April.

The fundraising by Lighthouse comes amid a surge in private equity and venture capital funding in the last couple of months, with deals and exits across sectors, including real estate, infrastructure and a growing tendency to buyout firms.

Private equity (PE) and venture capital (VC) investments hit a record monthly high of $7 billion in March, growing more than twice compared to the same period last year, according to EY’s Private Equity Monthly Deal Tracker, Mint had reported on 25 April. March 2018 had witnessed PE/VC investments of $3 billion.

As a result of the exceptionally high level of PE/VC investments in March 2019, the first quarter emerged as the best-ever quarter for PE/VC investments, with investments worth $11.4 billion, which is 37% higher compared to the same period last year, and almost one-third of the value recorded in 2018.

(As published in https://www.dealstreetasia.com on , May 07 2019. )