20 Feb SEAF Announces Establishment of SEAF SME Fund in India
Small Enterprise Assistance Funds (SEAF), manager of 12 direct equity investment funds in emerging markets in Central and Eastern Europe, Latin America, Central Asia and China, is pleased to announce the establishment of a fund dedicated to investing in Indian small and medium enterprises (the “Fund”). The Fund will consist of two separate investment vehicles, one of which will be subscribed for in rupees, and the other established offshore, which will be subscribed for in US Dollars. The Fund will be managed by an entity registered under SEBI. The Fund will focus on investing in growth-orientated Indian enterprises engaged in a variety of sectors, including, but not limited, to information technology and bio-technology, agri-business, specialized distribution, and retail. An important aspect of the Fund is SEAF’s partnership with the Small-Scale Industrial Development Bank of India and its venture network, SIDBI Ventures, and with Chennai-based SilkRoute IndChem.
In addition to its seminal investment commitment in the Fund, SIDBI and SIDBI Ventures will work together with SEAF and the Fund to identify appropriate investment candidates throughout India for investment. SilkRoute IndChem, in addition to its investment commitment, will also be involved in the management of the Fund. SilkRoute Indchem is a joint venture between SilkRoute, Singapore and Sanmar Group, India focusing on early stage investments.
The Fund is approaching a first closing of $20 million, with a second closing targeting an additional amount between $10 and $20 million. As with SEAF’s other funds, it is anticipated that private investors will be attracted by both SEAF’s track record of investment success as well as by the commitment of SIDBI and other public sector national and international investors in support of SMEs.
In addition to its fund offices in Central and Eastern Europe, Latin America, Central Asia, and China, SEAF also has business development offices in the Netherlands and Brussels, and in Washington, DC. SEAF will utilize its network to help the Fund’s portfolio companies reach international markets. Technical assistance is an integral component of SEAF’s investment strategy, utilizing both internal and external operational and marketing experts to help portfolio companies grow and prosper.
Mr. Bert van der Vaart, President and CEO of SEAF, who was in New Delhi to address the IndiaSoft 2003 conference, said: “We are excited about the prospects of the Fund, not only because of India’s exceptional base of promising SMEs involved in IT, but also because of an impending explosion of opportunities in the domestic market, given consolidation trends in a number of key sectors. Working with SIDBI and SilkRoute IndChem will provide us with the experienced and well-established local partners to realize the potential we see here.”
Mr. P. B. Nimbalkar, Chairman of SIDBI, said: “SIDBI is delighted to work with SEAF, whose worldwide network and experience will add a critical component to the realization of the terrific opportunities SIDBI sees in India’s small scale enterprises.”
Mr. N. Kumar, Chairman of SilkRoute IndChem said: “We believe the time is ripe for a fund targeting not only Indian entrepreneurs engaged in innovative information technology, but also in sectors such as specialized distribution and value-added processing.”
The importance of small and medium-sized enterprises as engines of job creation and economic development is widely appreciated. Increasingly, international financial institutions, local governments, and private investors are investing in investment funds that will provide capital to these companies, along with integrated management assistance to their managers, and in particular help in exporting product regionally and internationally.
With over twelve years’ experience, more than 200 investments, $150 million under management in funds located around the world, SEAF is uniquely equipped to initiate and manage investment funds in these markets. SEAF has invested more than $80 million worldwide and has achieved exits from almost 50 such investments at a gross internal rate of return in excess of 27% in US Dollars. SEAF is a separate US holding company that manages 12 privately-held SME equity funds internationally.