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India-focused mid-market PE Sabre Partners raises $ 73m for new fund

Aastha Maheshwari
30 January, 2024

India-focused mid-market private equity firm Sabre Partners has raised around $73 million for its fourth fund to back companies in fintech, healthcare and health tech sectors, a top executive told DealStreetAsia.

“We have received commitments of $73 million for our recent fund. The fund will look for opportunities where it can acquire an influential stake through equity instruments. In addition to evaluating the financial return potential of each investment, the fund will also evaluate the candidate on the additional criteria of development impact and innovation focus,” said Rajiv Maliwal, founder and managing partner of Sabre Partners.

The firm declined to divulge details of the total corpus that it is seeking to raise and a timeline for closing the fund.

The PE firm invests in innovative companies focusing on the healthcare, financial inclusion and climate change sectors.

“We target sectors addressing critical needs in India, particularly in health tech, affordable healthcare, fintech, allied financial services, and clean energy segments such as the electric vehicle ecosystem, waste management and recycling. We seek mid-sized companies with demonstrated growth potential, competitive differentiation, and a commitment to innovation,” he added.

Sabre’s LPs are learnt to be international DFIs, family offices, pension funds, insurance companies and HNIs.

Sabre raised its $204-million debut fund in 2004, $40 million second fund in 2009 and $43 million third fund in 2013. It started fundraising for the fourth vehicle in 2019. It is currently deploying from the fourth fund. Sabre has made over 21 investments and has scored 12 exits.

Some of its recent investments include Aviom India Housing Finance, which provides housing loans to women in rural and semi-urban areas, and health benefits startup Ekincare, which raised funding from
Sabre Partners in 2022. Its portfolio also includes Veeda Clinical Research, Healthspring, Portea, HCG, HungerBox, CoinTribe, DCB Bank and Card91.

Founded in 2002, Sabre Capital Partners typically deploys $5-15 million per deal, acquiring stakes through equity instruments like common shares, compulsorily convertible, preference shares or quasi-equity instruments like compulsorily convertible debentures.

Sabre targets mid-sized companies, which are generating revenues in the $25-75 million range, across its identified sectors.

The fund also makes select early-stage investments within the above sectors. In the case of smaller investments, its approach is to invest over subsequent rounds during the company’s growth phase.

Elaborating on the fund’s strategy, Maliwal said, “Our sector strategy offers the flexibility to focus on companies and sub-sectors that provide the best opportunities given the prevailing market conditions and to react to emerging opportunities. While there’s potential overlap with venture capital funds, Sabre’s emphasis on growth capital in Series B and C rounds minimises technology risks, positioning them to benefit from venture funds as a sourcing funnel rather than direct competition.”

Despite the bleak exit outlook for private equity funds in India marked by deferred listings and a decline in secondary sales, Maliwal is optimistic about the established avenues such as strategic sales, IPOs and buybacks.

“We have already started seeing a turnaround in India’s exit environment which will be further positively influenced by the macro environment, sustained FII inflows, China plus one positioning and outcome of general elections. As global and local conditions evolve, private equity firms will need to carefully navigate exit strategies, considering
market dynamics, operational performance, and valuation benchmarks”, he added.

At Sabre, the average holding period is 3.3 years and the firm has fully deployed its first two funds.

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