4. Hedge funds vs PE funds
1. Investment horizon: Private equity are typically long term
whereas hedge funds are typically short term.
2. Control: Private equity funds normally have control over the
companies in order to change business strategies, implement
governance and make operational improvements. Hedge
funds are normally minority shareholders with no control over
their investments.
3. Exit: Private equity companies often float or sell the stock they
own. Hedge funds simply sell their shares on public
exchanges.
4. Capital flow: Private equity firms have fund-raising cycles
every now and then where they raise capital for each fund –
they are ‘fixed term’. Hedge funds are Evergreen as they do
not have fund-raising cycles and continue to allow new
capital on a periodic basis, which can be invested and re-
invested until requested back by the investor.
5. About TVS Capital Funds Ltd
• TVS Capital Funds Limited was founded in
September 2007 by Gopal Srinivasan of TVS Group
• TVS Capital manages the TVS Shriram Growth Fund I
which is a Rs.600 crores domestic rupee fund
(Scheme 1A) established with a vision to develop
and nurture India’s mid-cap businesses into world
class companies.
• TVS Capital is currently raising funds for the Scheme
1B of the TVS Shriram Growth Fund I to increase its
total AUM to Rs. 1000 crores
6. Investment Strategy – TVS Capital
... invest in disruptive growth opportunities that are at the
intersection of "high growth sectors" driven by India’s macro trends
and a "developmental theme."
The guiding principles of growth by TVS Capital are:
• Build deep understanding of the business model.
• Invest in businesses with potential for 10 to 15 years of
sustainable growth.
• Ensure targeted return on investment by operationalizing
the full potential model of value creation.
• Ensure efficient return on time for the investment team.
• Ensure process effectiveness, quick and decisive
response to investee companies.
• Take risks with deep thought, discrimination and
diligence
9. Project expected
Equity Research Analysis
Assist the investment team/Research team in
• Searching and compiling prospective unlisted
companies in a target sub-sector
• Tracking listed market action relevant for the
portfolio companies
• Summarizing sell-side reports to get key industry
insights
• Preparing/updating fund presentations
• Quick financial analysis (margins/ROCE etc) for
target sub-sectors
10. References
• TVS Capital website:
o http://www.tvscapital.in
• IVCA Bain India Private Equity report 2011
• New Forms of Funding in Strategic Corporate
Finance: Entrepreneurial Finance, Venture Capital,
Private Equity and Hedge Funds by Guido
Eilenberger
