Courage Capital, a $1 billion Nashville, Tenn., shop, is preparing to launch its second strategy this fall, an India-focused special situations fund that will also target private equity investments. The firm is making the move because it views the world’s largest democracy as “an investment opportunity whose breadth and depth exceeds that of any in the world,” according to an investor presentation. “To draw an analogy, India is to the United States today what the United States was to Europe 100 years ago.” The Courage India Fund will seek to take advantage of the wide-ranging economic and political changes that are currently underway, said Jayant Sinha, who will co-manage the fund and its team of analysts in Mumbai.
The fund will focus on three sectors: financial services, power and small-cap IT services. Private equity deals will initially be sought in the power industry. The sector has been hampered by overbearing regulations, but this is in the process of changing, said Sinha, who expects it will soon take off just like the telecom sector has. “In effect, what we anticipate is a massive wholesale power market is going to take place in India,” he said.
Because of its private equity angle, the fund will have a two-year lockup. The minimum investment is $2 million; fees have not been finalized yet. It will likely close at $200 million. The firm was started in 1998 by Richard Patton, who was previously a co-founder of Woodmont Capital and earlier an analyst at Fidelity. Its biggest investor is Vanderbilt University and it has money from other endowments as well.
The India fund’s other co-manager is Founding Member Richard Patton, who is based in Nashville, where final investment decisions will be made for tax reasons. Sinha joined the firm in January from McKinsey, where he was a partner who “did a lot of work in India on the private equity side,” and also worked with Indian companies on their globalization and acquisition strategies.