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Wealthy Investors Favor Private Equity

Date: Thursday, May 8, 2008
Author: Emii.com

Well-known high net worth individuals have benefited from putting their surpluses into private equity/venture capital funds early, reports Sify.com.

Wipro chairman Azim Premji is said to have a personal fortune of over $400 million. His family office, Azim Premji Investments, manages this, channeling a portion directly into companies, both public and private, and investing some indirectly through private equity funds.

Nadathur S Raghavan, co-founder and former joint managing director of Infosys Technologies (he quit Infosys in 2000), founded Nadathur Holdings to invest into and nurture early stage companies.

Nowadays, he is also a limited partner in venture capital funds such as Ojas Venture Partners. But now, there are others too, though lesser known, who are becoming more aware of private equity as an asset class and are taking a shot at it.

So much so that certain domestic private equity funds have started focusing on this group as a key element in their fund-raising exercises. Sources said Kotak Private Equity, which closed its third fund of $440 million last month, got more than 50% of its commitments from high net worth individuals in India.

His firm is currently raising its Tara India Fund III, for which it has already got commitments of $145 million from overseas investors.

"We've just opened it to domestic investors," said Dalal, who estimates that Rs 150 crore (approximately $40 million) out of the total Rs 350 crore (approximately $90 million) targeted from the domestic investors, will come from high net worth individuals.