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Alternative Investment

NIIF to invest ₹400 crore in Lighthouse India’s fourth fund

Bengaluru: National Investment and Infrastructure Fund Ltd’s (NIIF) Fund of Funds has announced an anchor commitment of 400 crore (around $48.5 million) to consumer-focused Nykaa and Fabindia-backer Lighthouse Advisors Pvt. Ltd’s fourth alternative investment fund (AIF) to become its first domestic institutional investor.

“With a target size of up to 3,500 crore (around $425 million), Lighthouse India Fund IV AIF will invest in high-growth businesses in sectors such as healthcare, specialty manufacturing, digital transformation, and consumer products and services,” NIIF said in a statement.

In September last year, the PE firm had received up to $50 million commitment from International Finance Corporation (IFC), the private investment arm of the World Bank, into the fourth fund.

NIIF’s participation as an anchor investor in Lighthouse Fund IV makes it the first domestic institutional investor and is expected to help the fund catalyse further capital from high-quality domestic and global institutions, it added.

Mumbai-based Lighthouse, founded in 2006 by Sachin Bhartiya, Sean Sovak and Mukund Krishnaswami, is a mid-market consumer-focused private equity investor that has raised three private equity funds managing around $500 million assets under management (AUM). It has invested into more than 25 companies across the food, lifestyle, home improvement, and healthcare sectors.

The private equity (PE) firm invests between $20 million to $50 million range per transaction. In May 2019, it had raised the third fund with a capital of 1,750 crore, including a pool of capital for co-investment opportunities.

Besides Nykaa and Fabindia, some of its marquee investments include startups such as Wow! Momo, Bikaji Foods, Duroflex Mattresses and Medikabazaar, among others.

“For the past 15 years, we have partnered with some of India’s finest entrepreneurs, and this commitment is a vindication of our ability to continue delivering strong outcomes for our investors. We are proud that our first domestic investor is someone of NIIF’s reputation and quality and are looking forward to a long and successful partnership,” said Sachin Bhartiya, Co-Founder of Lighthouse.

NIIF Fund of Funds invests in fund managers with a strong track record and sets a high standard of institutionalization, including ESG (environment, sustainability and governance) practices. With this commitment, NIIF Fund of Funds is over 90% committed across seven funds, investing in nationally significant sectors such as climate, affordable housing, healthcare and pharmaceuticals, innovation, deep technology, and manufacturing.

“This investment aligns with the Fund of Funds’ approach of backing best-in-class fund managers. Through its deep knowledge of the Indian investment landscape and its ability to forge strong partnerships with Indian entrepreneurs, Lighthouse has demonstrated a strong track record and will provide NIIF Fund of Funds and its investors’ access to high growth sectors in India,” said Prakash Rao, ED & CIO – Indirect Investments, NIIF.

NIIF manages over $4.3 billion of equity capital commitments across its three funds – Master Fund, Fund of Funds, and Strategic Opportunities Fund, each with a distinct investment strategy committed to support the country’s growth needs.

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