Fund Overview

Zephyr Peacock India invests in and helps build companies which are rapidly growing with sustainable competitive advantage and creating value for the underserved segments of the population

THE INDIAN OPPORTUNITY

Zephyr Peacock India targets small to medium sized, established businesses that have the potential to become market leaders in one of the fastest growing economies in the world. The fund invests in companies that provide competitive advantages beyond low cost labor and benefit from India’s growing domestic demand

In April 2016, Zephyr Peacock invested in Varthana, a Company that provides innovative financial solutions to affordable educational institutions in India. CEO Steve Hardgrave said,

“We are thrilled to have such a great set of investors who are aligned with our vision to improve the quality of affordable education in the country. Their experience and support will be valuable as we extend our branch network, enhance our technology backbone and expand our ‘beyond loans’ initiatives over the coming years.”

Investment Thesis & Strategy

India has a large number of small and medium sized businesses that are in need of expansion capital to benefit from strong economic fundamentals such as strong GDP growth, growing domestic demand and the improved regulatory environment in India today.

While there are several funds active in the growth capital segment, demand continues to exceed supply with significant barriers to entry. ZP’s typical deal size is below the range of many large India focused private equity firms but above the capacity of many local sources of capital. The ZP Funds target medium sized, established businesses in India which have the potential to become market leaders in one of the fastest growing economies in the world. ZP targets companies providing competitive advantages beyond low cost labor and benefiting from India’s growing domestic demand from an increasing middle class.

An important part of ZP’s strategy is to secure significant rights in shareholder agreements (e.g., budgetary oversight, approval of appointments to key positions, ability to force an exit, etc.) and board representation. ZP actively monitors portfolio companies to help them implement their growth strategies. At least one member of the ZP Investment Team typically will serve on the board of a portfolio company. Post-investment, the Manager expects to work actively with the management of its portfolio companies to enhance financial and organizational structures, business strategies and implement professional governance practices. Divestment is expected via strategic sale or a stock market listing on the Indian stock markets three to five years after investment.

Focus

Zephyr Peacock focuses on underserved growth stage enterprises

  • SME’s contribute 45% of India’s industrial output. Equity funding need of US$ 38 billion* that is largely underserved
  • Multiple attractive opportunities exist in pharma, food and agriculture, financial services, and infrastructure support services segments

Invest

ZP sources investments via in-depth sector research

  • Develop investment thesis through in-depth industrial segment analysis
  • Invest in companies with proven business models and path to market leadership
  • Acquire significant minority stakes or controlling stakes in select situations

Build

ZP focuses on “building” companies through active management

  • Professionalize management
  • Establish scalable systems and processes
  • Facilitate international expansion

Zephyr Peacock India 

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B2, 2nd Floor
Panathur Junction, Outer Ring Road
Bangalore 560 103, India


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