Capital Dynamics backs Indian fund restructuring – exclusive

Capital Dynamics has backed the restructuring of an Indian growth healthcare fund in a transaction advised by Duff & Phelps.

The Zug-headquartered investment firm acquired limited partners’ interests in Asia Pacific Healthcare Advisors‘ AHF Investment Trust fund, according to a statement obtained exclusively by Secondaries Investor.

The deal involved three assets held in AHF Investment Trust, which is understood to be a 2011-vintage. These are Ben Franklin, a pan-India chain of optical retail centres; Sabka Dentist, India’s largest dental care clinic chain; and Forus Health, a technology firm focused on preventive ophthalmic care.

The transaction closed on Monday.

As part of the deal, AHF Investment Trust’s fund timeline is reset and Asia Pacific Healthcare Advisors will make follow-on investments into the fund’s portfolio companies.

“Duff & Phelps is committed to supporting the Indian private investment ecosystem,” said Richard Olson, managing director at Duff & Phelps. The firm says there is “significant opportunity” in India and that it is expanding its practice in the country.

Olson and Capital Dynamics declined to comment on the size of the deal, the percentage of LPs who sold their stakes and other financial terms.

India has been growing as a potential hunting ground for GP-led deals. In a 2015 country report, industry body EMPEA described a “comedy of errors” in the aftermath of the global financial crisis involving huge amounts of dry powder, unpalatably high valuations and a lack of exit opportunities resulting in India’s private equity performance not meeting expectations and both GPs and LPs losing money.

Opportunities for secondaries buyers have attracted firms to the country. Direct secondaries specialist NewQuest Capital Partners opened a Mumbai office last year, while Mercury Capital Advisors opened a New Delhi office in January to add to its deal origination and project management business.

New Delhi-based AHF was founded in 2011 and invests solely in Indian healthcare and life sciences.

AZB & Partners served as legal advisor to AHF and Cyril Mangaldas served as the local legal advisor to Capital Dynamics.

Capital Dynamics is seeking $750 million for Capital Dynamics Global Secondaries V, as Secondaries Investor reported in August. It is unclear which fund the firm used to invest in this deal.

Duff & Phelps hired three secondaries professionals from Tullett Prebon this year as part of the expansion of its advisory team. The firm was acquired by Permira Adviers last year.