Avendus launches ₹3,000-cr late-stage fund to invest in tech, healthcare firms

Bengaluru: Avendus, a financial services firm, has launched a third Future Leaders Fund for which it aims to raise about ₹3,000 crore, including a green-shoe option to raise up to ₹1,500 crore more.

The late-stage fund, which will focus on large-cap investments in private markets, intends to make 10-12 investments, with an average ticket size of ₹200-300 crore each, Avendus said in a statement on Wednesday. 

The fund will target sectors such as financial services, consumption, digital and technology, healthcare, and manufacturing.

"With Avendus Future Leaders Fund III, our approach remains straightforward - harnessing the vast potential of late-stage private opportunities while co-opting the existing financial sponsor ecosystem," said Ritesh Chandra, managing partner, Avendus Future Leaders Fund. "We continue to back differentiated, high-quality businesses with sustainable competitive moats and a clear roadmap to liquidity."

Fund's investment strategy

The fund’s investments will include both primary as well as secondary transactions, in companies that have disaggregated institutional investor shareholding. These companies will need to have a strategic competitive edge, execution capabilities across market cycles, and strong operating metrics with dominant market positions, the statement added.

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Through its extensive network and expertise in the investor ecosystem, Avendus' third fund aims to leverage differentiated opportunities and multiple exit options including secondary exits and sale through public markets to provide periodic liquidity to backers. 

At a broader level, this has become increasingly important as investors struggle to get returns or exits in the aftermath of overvalued investments made during the pandemic.

Exits with 4x returns

Some recent exits from FLF's first fund include Lenskart Solutions Private Limited and the National Stock Exchange of India Limited, with "both generating nearly 4x returns for the investors within four years," Avendus claimed.

While the first fund has returned the entire investor capital ahead of the stipulated time with attractive returns, the second fund has completed 11 investments to date and is planning to deploy its remaining capital over the next few months, Avendus added. 

The second fund also expects to see four of its portfolio companies to list on the exchanges over the next 6-9 months.

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Across the two funds, FLF has handled over ₹1,850 crore in assets under management. 

The FLF platform, which is backed by prominent Indian and US family offices as well as domestic institutions, counts Bikaji Foods, Ujjivan Small Finance Bank, Licious, FirstCry, Delhivery, and VerSe Innovation (Dailyhunt) among its portfolio companies.