Tata Group to realign PE biz, shut key fund

Limited partners or existing partners in the fund are likely to get their money back by the end of 2022, either through initial public offerings or by offloading shares in the businesses. 

"Some of the investments have done extremely well," a source told the Economic Times. The salt-to-software conglomerate's financial and investment services unit, Tata Capital, said private equity would continue to be a key focus area for it, and that it has taken the decision to stick with two other funds - Tata Capital Healthcare Fund and Tata Capital Growth Fund. 

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Tata Opportunities Fund's present term will end in March 2022, and it can further be extended by another year, a Tata Sons spokesperson told the publication, adding that the fund's management team "is committed towards achieving optimal and timely exits from its investment before the end of fund life."

The opportunity fund was the brainchild of former Tata veterans Praveen Kadle and Noshir Soonawala and its investors comprise BDT Capital, Temasek Holdings, Korea Investment Corp, Mizuho Corporate Bank, Mitsubishi Corp, the Bahwan Group, Temasek Holdings, and large University endowments from the US.

Meanwhile, regarding its decision to consolidate future fund offerings through healthcare and growth funds, Tata Capital told the publication, "Tata Opportunities Fund has done extremely well - however since our strategy was to consolidate all future sector-agnostic funds into one fund, we have decided to use Tata Capital Growth Fund as a vehicle to raise future LP commitments for sector-agnostic funds. Besides, Tata Capital Growth Fund, we are also growing our Healthcare Fund."

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Meanwhile, Tata Sons, in its reply, said Tata Capital has been operating PE businesses across several formats. "The company based on its view on potential investment opportunities has decided to launch a second fund for the healthcare and growth funds and not to raise a new fund in the Opportunities Fund format," its spokesperson said.

"Tata Opportunities Fund was launched in March 2011 with a term of 10 years with a provision to extend it by another two years. In September 2020, its term was extended to March 2022 and can further be extended by another one year," the spokesperson added.