Motilal Oswal Alternates raises $800M in first close of fifth PE Fund

Private equity firm Motilal Oswal Alternates has announced the first close of its fifth fund, India Business Excellence Fund V (IBEF V), at $800 million. The fund, launched in mid-April, was initially targeted at $750 million with a hard cap of up to $950 million.

The close comes as the firm wraps up deployment of its $550 million fourth private equity fund, IBEF IV, and finalises its $232 million sixth real-estate fund, IREF VI. 

“Winners are those who sustain growth. Getting the Q—quality of business and management—right is critical. We have been fortunate to back companies such as AU, Dixon, Uno Minda and others when they were sub-$ 100 million businesses. Today, they have scaled to $5–10 billion+ in value,” said Vishal Tulsyan, Founder & Chairman, Motilal Oswal Alternates.

Alongside the launch of its private credit business, the firm, in a statement on Thursday, stated its assets under management (AUM) will cross $3.5 billion across private equity, real estate, and private credit.

Backers in the latest fund include marquee investors across the US, Europe, Japan, the Middle East and Asia, including International Finance Corporation (IFC), Adams Street Partners, prominent Japanese institutions, as well as global and domestic family offices and high-net-worth individuals. 

As in earlier funds, the Motilal Oswal Group and team have contributed ~11% of commitments. For the remaining $150 million, the firm said it has received soft commitments and is in documentation with global asset managers, sovereign wealth funds, domestic banks, and insurance companies.

The firm said that Fund V will primarily target mid-market investments of $40 million to $80 million across consumer, financial services, healthcare, technology-led businesses, and niche manufacturing.

“With India’s GDP growing ~2.5x the world average, we see exciting times ahead as the economy moves from $4 trillion today to $10 trillion in the next decade. Fund V allows us to continue our legacy of partnering with businesses with strong fundamentals and scalable models, accelerating their growth and creating lasting value,” Tulsyan added.

Since 2007, the firm has backed 50 companies and exited 23, generating about $1 billion in liquidity. Its portfolio has posted average revenue growth of 30% and profit growth of 40% over the past year. 

Some of its recent bets include Lahori Zeera, a cumin-flavoured carbonated drink; HealthKart, a sports nutrition brand; Lal Sweets, a packaged confectionery company; and Megafine Pharma, a speciality API maker. Under Fund V, about 14% of the corpus has already been deployed across two deals, one of which is Lahori Zeera.