Foundation PE buys 100% LP interest in Prime Venture Partners’ first fund

This is a rare transaction in the venture capital (VC) and private equity (PE) industry in India where the LP interest has changed at the fund level itself.

In a statement, Prime Venture Partners said the transaction has helped its LP deliver a healthy, top-ten-rate return in its ninth year of operations and have grown the fund by four years. In addition, Foundation Private Equity has now become the only LP in Prime Venture Partners’ first fund.

In a separate conversation with VCCircle, Sanjay Swamy, Co-Founder and Managing Partner, Prime Venture Partners said that the transaction has given four times returns to his LP.

Prime Venture Partners launched its Mauritius-based $8 million first fund in 2012. The fund’s LPs included venture capital firm Mayfield, Chamath Palihapitiya’s Social Capital, Yahoo co-founder Jerry Yang and other high net worth individuals (HNIs) from Silicon Valley. Swami said.

He explained that the transaction shows that even without exiting portfolio companies, venture capital firms can provide “meaningful exits” to their LPs at the fund level itself.

“From LP perspective, the market will find it very attractive. There is only change in the tenure of the fund and there is no impact on the portfolio firms,” ​​he added.

Prime Venture Partners’ first fund portfolio includes seven firms, including Quizzes, an interactive learning startup that last year raised a Series B funding round led by Tiger Global, and Happy, which was founded by Kunal Shah late last year. Led was acquired by Cred.

Swamy also said that this transaction can bring more buyers in the industry. What worked in Prime Venture Partners’ favor was its focused portfolio, he said.

“Funds that have a small portfolio and meaningful ownership will be attractive for such results,” he said. He also added that the deal structure may also differ and LPs may also do partial exits instead of full exits.

Jeremy Fu, co-founder and partner at Foundation Private Equity, said in the statement that it has taken a patient approach so far, evaluating enterprise opportunities in India, and is now building “a very high quality GP team and portfolio”. Excited to support. “With its first transaction in India.

Candor Asia Limited acted as advisor to this transaction.

There are rare instances of a secondary deal in the PE/VC industry in India where LP interests have changed hands. In March 2018, TR Capital acquired a 50% LP interest in the first fund of domestic private equity firm Taino Capital. In the same year, Switzerland-headquartered global asset manager Capital Dynamics offered to exit the Asian Healthcare Fund’s first non-institutional LP of the fund.

Swamy said, while Prime Venture Partners has facilitated full exit for its LPs from its first fund, the venture capital firm is also nearing the final closure of its fourth fund.

Prime Venture Partners In August last year, it announced the closure of its fourth fund for $75 million.

The target corpus of the fourth fund is $100 million. The early-stage investor closed his second fund for $46 million in 2016 and his fund III in 2018 for $72 million.