- ByStartupStory | March 13, 2024
Peak XV Partners, formerly Sequoia Capital India and South East Asia, has introduced the Peak XV Anchor Fund, a pioneering permanent capital vehicle (PCV) aiming to emerge as a major supporter of new venture capital funds and delve into diverse asset classes.
The announcement, conveyed to nearly 100 limited partners (LPs) during a global investor meet in Delhi on Tuesday, disclosed that the fund is set to kick off capital commitments from April 1, 2024. The Anchor Fund will not only serve as a backer for new venture capital endeavors but will also explore opportunities in publicly listed entities, fostering collaborations with businesses and fund managers on a global scale.
The Peak XV Anchor Fund sets itself apart as the first venture capital firm to establish a perpetual fund directly from its internal balance sheet. This strategic move follows the division of Sequoia Capital in June 2023, resulting in the formation of Peak XV Partners. The fund had previously secured $2.85 billion as part of a new fund in 2022, actively deploying capital in India and South East Asia.
The unique aspect of this perpetual fund lies in its intention not to impact LPs who have invested in the main fund. According to details shared with the LPs, the Anchor Fund is designed to enhance accountability and alignment with investors. It is expected to foster a deeper commitment (“skin in the game”) and cultivate team cohesion for the long term.
Permanent capital vehicles (PCVs) have gained prominence in the private equity sector as a means to transcend lock-in periods, and this move by Peak XV aligns with recent considerations by the Securities and Exchange Board of India (SEBI) to potentially permit PCVs, encouraging participation from long-term investors like pension funds.
The leadership of the Anchor Fund is anticipated to be independent, further emphasizing Peak XV’s commitment to this innovative venture. With its ambition to become the largest supporter of new venture capital funds and explore untapped asset classes, the Peak XV Anchor Fund signals a significant evolution in the landscape of venture capital financing.
