Manipal Education and Medical Group (Manipal Group), a privately held conglomerate focused on education, healthcare and research, is partnering with UK-based development financial institution CDC Group Plc to float a Rs 500 crore (around $75 million) healthcare fund, according to a media report.
The fund will invest in ‘out-of-hospital’ care companies, like diagnostics and home-care services in India, Africa and South Asia, The Economic Times reported, citing executives of both the firms.
Ranjan Pai, CEO of Manipal Group, told the newspaper that the fund will prefer to provide individual investment above $10 million per transaction.
The partnership will primarily focus on helping established firms with strong management teams build scale through acquisitions.
“Manipal’s support to the investee companies will be at the board level in terms of strategic direction, validation, suggestions for process improvement, service diversification, identification of key manpower resources and design of effective control systems,“ Pai said.
Meanwhile, both Manipal Group and CDC will separately continue to invest in the conventional hospital space.
Email queries sent to Manipal Group and CDC did not elicit a response till the time of filing this article.
The new fund joins a growing list of healthcare funds in the country, including Quadria Capital, Sabre Partners, Asian Healthcare Fund and India Life Sciences Fund II.
Manipal Group and CDC
Bangalore-based Manipal group, which was founded in 1953, runs its own hospital chain Manipal Health Enterprises Ltd.
The hospital chain, which competes with Apollo Hospitals and Fortis Healthcare, completed a transaction to raise Rs 900 crore($146 million) from private equity firm TPG in 2015.
It operates 15 multi-specialty hospitals in states, including Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu and Goa, according to its website.
Ranjan Pai is also a limited partner (LP) in a venture capital (VC) fund Aarin Capital, which also has Infosys co-founder TV Mohandas Pai as an LP.
CDC, which was founded in 1948, is an investment firm specialising in direct and fund of funds investments. It prefers to invests in infrastructure, financial institutions, health and education, food processing, manufacturing, construction (including real estate), with a focus on South Asia, including India.
The UK firm’s recent investment in India was in a Bengaluru-based Janalakshmi Financial Services Pvt. Ltd, making it CDC’s fourth investment in India’s growing microfinance sector.
CDC last year put money in Ujjivan and in Equitas in 2013. It also has invested in Utkarsh Microfinance, another small finance bank in the making.
In the healthcare space, the firm’s direct investment include in Hyderabad-based Rainbow Children’s Medicare Pvt. Ltd, which runs a chain of paediatric and maternal care hospitals under the Rainbow Hospitals brand.