“India represents a meaningful part of our Asia portfolio and continues to be a geography that we are excited about,” said Kunal Sood, managing director at Pantheon based out of Singapore.

Pantheon joins a growing list of global investment firms such as US-based HarbourVest Partners that have turned their attention to India, drawn by not just robust economic, manufacturing and services growth, but also its burgeoning startup ecosystem.

“I think there has been a lot of progress on various fronts starting with government reforms, digitization, production-linked incentive (PLI) support for manufacturing, and formalization of the economy,” Sood said.

“These are in turn being driven by factors such as manufacturers and retailers globally employing a China-plus-one supply chain strategy, a significant ramp-up in infrastructure investment, and robust GDP growth.”

While a significant chunk of Pantheon’s Asia portfolio is India-focused, Sood did not disclose the exact figures.

Recurring themes

Recently, US-based private markets firm HarbourVest Partners also detailed plans on scaling up its funds and direct investments in India. Pantheon and HarbourVest last month anchored Chrys Capital’s $700-million continuation fund alongside a third investor, LGT Capital Partners.

Apart from private equity firms, Pantheon has also invested in a couple of Indian venture capital funds–Matrix Partners and Avataar Ventures.

In India, Pantheon is keen to invest in sectors such as business and technological services, med-tech and big pharma, and digital adoption–a recurring theme playing across business-to-business and business-to-customer streams.

With rising disposable incomes, Indians have become more aspirational and are finding newer categories to spend on, Sood said. Besides, he added, India is seeing a greater sense of financial inclusion as well as strong participation from retail investors in the capital markets.

Thriving startup ecosystem

Sood is responsible for the evaluation, completion and monitoring of primary and secondary investments and co-investment opportunities across the Asia-Pacific region.

Pantheon, which has invested in private markets for more than 40 years, has expanded its presence over the years with offices in 12 geographies, including Berlin, Chicago, Tokyo, New York, and Hong Kong. Last year, the firm opened an office in Singapore as a part of its plans to ramp up investment activity in Asia.

With about $62 billion in discretionary assets under management, the company handles asset classes including private equity, real assets, which include infrastructure and real estate, and private credit.

India, Sood said, is complementary to Pantheon’s larger Asia portfolio on several counts, including succession planning and business carve-outs.

“India really stands out for the pace of economic growth, strong macroeconomic factors and the diverse consumer market it has. Creating an Asian portfolio is always so interesting as there are so many underlying themes and each market is unique with different strengths,” he said.

Specific to India, Pantheon is focused on the venture capital and private equity space owing to the country’s thriving startup ecosystem.

“While venture capital and growth equity continue to be exciting parts of the market, India is also seeing a rise in the number of private equity buyouts as there is a lot of depth and maturity in the market now that is enabling fund managers to grow and evolve,” Sood said.

“This is why business owners are increasingly comfortable in handing over the reins to private equity buyers, and in many cases retaining some share for themselves to ride that upside.”