Novastar Partners Launches ₹350 Crore Fund to Back Indian Venture Capital and Private Equity

Novastar Partners, previously known as Dhruva Investment Partners, is introducing its first fund of funds (FoF). The target for this maiden fund is ₹350 crore, with an additional option to raise ₹150 crore, known as a green shoe option. This fund will act as a Limited Partner (LP) to invest in other venture capital (VC) and private equity (PE) funds that focus on Indian companies. It is registered as a Category II Alternative Investment Fund (AIF) in India.

Novastar aims to offer investors a simplified and curated way to gain exposure to India's growing private market, including top-tier investment managers and promising private companies. The firm highlights its deep relationships within the ecosystem and rigorous due diligence processes. Dhruv Jhunjhunwala, an alumnus of New York University and former RBC Capital Markets professional, leads the firm with experience evaluating over 100 private market opportunities. Gaurav Sharma, a Duke University alumnus with experience at Bridgewater Associates, is also a General Partner.

The founders believe India is entering a "golden age" driven by economic growth, consumption, and digital adoption, making it a prime time for private market investments. The fund expects to achieve its first close, allowing it to begin operations, within the next four to six months.

Impact: This launch signifies a growing trend of specialized funds targeting India's burgeoning private market. It could lead to increased capital flow into Indian startups and growth-stage companies, potentially fostering innovation and job creation. It also provides more avenues for sophisticated investors to participate in India's growth story. Rating: 7/10

Difficult Terms: Fund of Funds (FoF): A fund that invests in other funds, providing diversification and access to multiple investment strategies managed by different managers. Limited Partner (LP): An investor in a private equity, venture capital, or hedge fund who provides capital but does not manage the fund. Green Shoe Option: An over-allotment option that allows a fund to increase its size if demand is strong. Category II Alternative Investment Fund (AIF): A type of investment fund registered with SEBI that includes funds investing in private equity, venture capital, and other alternative assets. First Close: The initial closing of a fund where a minimum amount of capital has been committed by investors, allowing the fund to start investing. General Partner (GP): The manager of a private equity, venture capital, or hedge fund who makes investment decisions and manages operations. Meaden Fund: The first fund launched by an investment firm.