Indian VC and PE funds eye equity value in their own management firms

what happened

Indian venture capital and private equity firms have long earned income from management fees and a share of profits, according to Moody's. Some are now exploring a third source: holding a stake in the fund-management company itself, which could one day be listed on an exchange, said Ashish Kumar, co-founder of Fundamentum Partnership and F2A.

He thinks four or five firms could try a version of this within two to three years. The plan would be to keep strong portfolio companies for longer and later sell shares of the management business. Most firms have not moved beyond discussion, he noted. F2A, which recently raised a $370 million fund, is focused on deploying that capital, and a listing is premature, if it happens at all.

why it matters

Publicly listed private equity firms are already common in the US, with Blackstone, KKR, Apollo, Carlyle and TPG going public between 2007 and 2022, and Gaja Capital listing in India on 26 August. Kumar points to three drivers: equity value in the management business, the long growth of technology companies, and limited partners who prefer to keep winners rather than pick a new fund every few years. For investors this would be a structural shift in how fund managers earn money, but it remains an early-stage idea rather than a near-term market event.

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