In October 2004, SEAF teamed with Kotak Mahindra, one of India’s leading financial institutions, to launch the India Growth Fund. SEAF managed the SEAF India International Growth Fund (SIIGF) in tandem with Kotak Mahindra Private Equity’s management of the domestic India Growth Fund, through a unified Indian trust, to which SEAF served as an investment advisor. SEAF’s role in this partnership included connecting Indian companies to markets in the United States, Europe, Latin America, and East Asia. With Small Industries Development Bank of India (SIDBI), DEG, Calvert, and the United States Agency for International Development (USAID) as anchor investors, the India Growth Fund is currently capitalized at approximately USD 161 million.
As one of the greatest growth stories in contemporary emerging markets, India represents an excellent opportunity for small and medium enterprise (SME) financing. Departing from its post-liberation socialist-leaning policies, over the past 10 years India has successfully made the transition to a dynamic, largely free market economy. Coupled with increasing reforms, the country has experienced an influx of private sector investment. Despite India’s impressive economic growth, however, the country still contains one of the highest concentrations of people living below the poverty line, especially in rural areas. Through its management of SIIGF, SEAF has worked to expand available capital for India’s SMEs, and, in so doing, achieve increases in employment, allowing people in underserved markets to become skilled workers and earn steady incomes.
The India Growth Fund has invested in a diversified range of Indian companies with high-growth potential and sustainable competitive advantages. Investing primarily in dynamic and fast growing sectors like life sciences, media and entertainment, specialized manufacturing, information technology and infrastructure related services such as healthcare, logistics and distribution, the fund helped address the missing middle of financing with capital investments .
SEAF’s experience with Kotak Mahindra Private Equity has also helped it prepare for the management of its proprietary SEAF India Agribusiness International Fund.