Quadria Capital, a private equity firm focused on healthcare in Asia, has closed its third fund with $1.07 billion in total commitments, exceeding its original $800 million target, the firm said.
For the first time, it has raised around 10% of the fund from Indian investors, including family offices, insurance companies, and corporates, Amit Varma, co-founder and managing partner of Quadria Capital, told Mint in an interview.
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Quadria Capital’s largest existing backers include prominent North American and European sovereign wealth funds, asset managers and strategic corporates. The Fund also secured new commitments from institutions across the Gulf Cooperation Council (GCC), including Saudi Arabia, the UAE, and Bahrain, it said.
The oversubscribed fundraise comprises over $954 million in primary commitments and $114 million in committed co-investment capital. The firm said an additional $300 million in co-investment capacity is anticipated over the course of the investment phase, bringing total committed capital to approximately $1.3 billion upon full deployment.
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“About 60% of the fund is likely to flow into India,” Varma told Mint, adding that almost 48% of the fund has already been deployed. “We are likely to fully deploy this fund III by 2027.”
The latest fundraising effort is approximately 60% larger than the firm’s previous $600 million fundraising effort in 2020.
Through this new fund in India, the firm has backed companies such as NephroPlus and Maxivision Eye Hospitals, Medibuddy and Encube Ethicals. It has also successfully exited from companies such as Akums Drugs and Pharmaceuticals, Concord Biotech, Healthcare at Home and AIG.
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Talking about its performance in the second fund, Varma said that the fund, which began investing in 2021, is marked at over 2x the principal capital. It has reported a DPI (distributed paid-in, which is a measure of capital already returned to Limited Partners or LPs) at 1.1x. “We should be completely exited by 2027 with a DPI of almost 1.1x,” Varma said.
Varma said that through Fund III, the firm will seek to write larger cheques in approximately 10 market-leading companies, taking significant minority and majority stakes.
“We are looking at opportunities in med tech and diagnostics, because of who we are in our success in hospitals. I think the other area where we are beginning to see smaller ticket sizes is digital health opportunities, where people are looking at end point (near the customer), point of care, testing. And lastly, adjacencies, especially in planetary health and services,” he said.
Planetary health refers to the changing disease profiles due to climate change.
Founded in 2012, Quadria Capital manages over $4 billion in assets across 27 investments in South and Southeast Asia, including India, Vietnam, Indonesia, Malaysia and Singapore.
The target corpus of Quadria Capital’s first fund was $300 million, although it eventually invested $450 million, including co-investments from its LPs. It raised $600 million in 2016 towards its second fund, and eventually deployed $750 million, including limited partner co-investments.
Varma said that 40% of the new fund will go to other Asian countries and the GCC, adding that the India-GCC corridor is becoming increasingly important.