“The (first) series is starting to mature over this 12 month period, hence we are returning capital and will fully exit these positions in the course of the next 12 months,” said Sameer Nath, chief investment officer and head private equity and venture capital at 360 one WAM.
Last week, 360 One was in the news following a report by the Organized Crime and Corruption Reporting Project (OCCRP) that said the company structured two funds—Emerging India Focus Fund and EM Resurgent Fund—to invest in Adani group entities.
The report said Adani family members invested in overseas vehicles, which then invested in Adani group funds, manipulating the share prices.“The funds, as on date, have zero investment in any of the shares of Adani Group. In the past, among other portfolio investments, the two funds have had investments in shares of Adani Group companies; all of which were sold in 2018,” 360 One said in a filing to the exchanges on 30 August.
“We wish to clarify that the PE arm or any other arm never had investments in any of the Adani group firms and never had the PE arm raised capital from the Adani family for the pre-IPO fund,” a spokesperson for 360 One Asset said on Sunday. Pre-IPO funds have a fund life of five years, though they can seek an annual extension from limited partners—or the fund’s investors—for up to two years.
360 One Asset began raising its first set of pre-IPO funds in 2017. It has raised ₹11,500 crore to ₹12,000 crore across three broad strategies for its pre-IPO funds. The first tranche of around ₹7,000 crore is coming to the end of its fund life in 2024. “We have three IPOs lined up back to back every quarter between now and next year. So we will be returning a good chunk of that capital,” Nath said.
The upcoming IPOs include Protean e-Gov Technologies Pvt. Ltd (NSDL e-Governance), National Securities Depository Ltd and Northern Arc. Some of its earlier exits include the Bikaji Foods International IPO, where the fund sold a large chunk. “We are running a high teens IRR (internal rate of return) and decent DPI (distributed to paid-in capital),’ Nath said about the first pre-IPO tranche.
IRR is a metric used to estimate the return on investment while DPI is used to indicate the amount of capital returned to investors compared to their commitments.
Due to the volatile nature of the primary markets, 360 One Asset in recent years has also been strategically investing in companies planning to list within 18-24 months.
“To improve the return profile, we can do late-stage middle-market PE, where the companies are one-three years away from listing. This improves return without changing the risk profile,” Nath said, citing the example of the fund’s investment in Kauvery Hospital.
“About half of the deals are pure pre-IPO, and half are in companies one-three years before the listing,” he added.
Other investments for the fund include SK Finance, SBI General Insurance, Nephro Plus and Care Health Insurance.
Pure pre-IPO is investment in a firm after the draft prospectus is filed, for instance, investments by 360 One Asset’s pre-IPO fund in Syrma SGS Technology and Avalon Technologies.
Overall, 360 One is likely to have returned close to ₹11,000 crore across multiple funds. The firm has also come to the end of its first fund of fund raised in 2016. This fund has invested in funds such as Chiratae, Orios, Kae Capital, India Quotient and Blume VC, among others, and is returning close to 3x in capital, Nath said.
It has a ₹1,500 crore financial services-focused pre-IPO fund through which it has invested in companies such as the National Stock Exchange, TransUnion Cibil and CAMS.
Apart from the fund of funds and the pre-IPO fund, 360 One has a multi-asset class fund of ₹800 crore which it invests across PE (40% of the fund), credit (30% of the fund) and real estate (30% of the fund), said Nath.
Nath said the firm will invest anywhere between $50 million and $500 million in companies from its various funds. The firm has total assets under management of ₹21,000 crore across its various vehicles that invest primarily in the four themes of technology, financial services, healthcare and consumer. With private credit, real estate, PE and IPO fund put together, the firm manages around $7.8 billion of assets.