Rabo Equity Advisors, the private equity (PE) arm of Rabobank, is all set to sign its first investment deal this month. This, amidst turmoil around PE firms? inability to raise sufficient funds and difference between promoters over valuation.
Rabo Equity Advisors is expected sign three more deals next month, following the present one. The investments, about $10 million each totalling $40 million, are from its $100 million food-agriculture fund.
The four un-listed companies are in areas like food processing, agri-biotech, seed manufacturing and diary business. As per the deals, Rabo will acquire about 20-28% stake in each company and will have the right to take a call on any management decision. The companies have sales turnover ranging Rs 80-200 crore.
Rabo Equity Advisors plans to invest 75% of the $100 million food-agriculture fund by the end of 2009, following which the company is expected to start its next fund-raising process. The investments will be done in sub-sectors such as poultry, cold storage, renewable energy, wine manufacturing and food retailing.
Rajesh Srivastava, chairman and managing director, Rabo Equity Advisors, said, ?There is tremendous potential for the food-agriculture sectors in India. Due to mounting population, food consumption in the country will increase. With our investments, we can add value to the sectors, as per-capita consumption is still low in India.?
However, he refused to disclose details of the next fund. ?It?s too early to say. As of now, our focus is on investing the present fund,? he said. The exit will be done in a span of 3-5 years. ?The exit route might be a strategic sale through an initial public offer (IPO). A few of the firms in the pipeline have the potential for IPOs,? he added.
Srivastava has over eight years of experience in the food and agribusiness sectors.
He joined Rabobank India in August 1998 from The GIC Group, an American consulting company specialising in the food and agribusiness sector. The PE fund in question is titled India Agri Business Fund; it is an offshore fund based out of Mauritius.
Rabobank, which has sponsored the fund, has provided $25 million towards the fund, while International Finance Corporation, FMO, a Dutch development bank, and DEG, member of the German KfW Group, will invest $20 million each.
Private equity investors pumped in a total of $11 billion in 274 deals till November 2008. The average deal size was $40 million.
Fund focus
• Rabo Equity will sign its first investment deal this month
•This will be followed by three more deals next month
•The investments are from its $100 m food-agri fund
•Rabo will acquire about 20-28% stake in each company
