Hanover Square Capital to start India fund

Arvinder Sood, CEO of Hanover Square Capital, says that they will be starting an India fund and they are looking at raising £100 million.

He adds that they are looking at infrastructure, IT and pharma companies and they are looking at an investment of £8-10 million in each company.

Excerpts from CNBC-TV18's exclusive interview with Arvinder Sood:

When will you be able to launch your India product? How much money are you targeting, and when will you start investing in India?

We are planning to launch our fund in September-October and we are targeting to raise around £100 million. We are planning to start investing soon thereafter.

This is an infrastructure product, so will it target only infrastructure stocks in India?

Not really, it is going to principally concentrate on emerging opportunities, particularly in the SME sector including infrastructure and allied infrastructure investment opportunities.

What else might come under that ambit for you?

One has to look at the India growth story in the broader context and also in a narrower context. In broader context, India affords substantial returns on risk capital vis-à-vis some of the other markets in Asia, particularly in Japan.

We have attempted to sort of allocate their capital to

segments of the market where they have been able to monitor substantial value. So our focus is going to be IT, IT related products or companies, pharma and the whole range of developmental sectors in this market.

Give us a couple of cases in point, in-terms of size of companies that you would look at in infrastructure, IT or even pharma?

The size will vary. The market cap that we will be focusing on, will range anywhere from $100 million to $200 million, although some of them maybe private and some larger companies as well.

But, significantly, the whole development of special export zones in India lend themselves to huge opportunities within that space as well, whether it is in Punjab, Haryana or other parts of India. So the investment size that we will be looking to allocate per investment would be something like $8-10 million per transaction on the upper end.

Are you essentially looking at something akin to a midcap fund out here?

That's one segment of our fund, but then crucially there will be project related transactions where our fund will take first loss positions on a co-investment right basis with other first loss takers, promoters themselves included.

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