From mint · Mansi Verma · · 2m
Fund managers boost personal capital in funds to win LP trust
Indian private equity and venture capital managers increasingly commit more of their own money to new funds to signal confidence and reassure investors.
In brief
Indian private equity and venture capital managers increasingly commit more of their own money to new funds to signal confidence and reassure investors. Indian fund managers are putting more of their own money into funds to build trust with limited partners amid rising concerns over fund performance. Originally…
Fund managers increase personal capital in funds
Indian private equity and venture capital managers are committing more of their own money to new funds to signal confidence and reassure limited partners.
Motilal Oswal's 10-12% commitment trend
Motilal Oswal Private Equity has consistently committed 10-12% of each fund raised over two decades, growing from ₹ 550 crore in 2007 to ₹ 8,500 crore this year.
Carnelian's ₹ 100 crore commitment
Boutique firm Carnelian Asset Management is committing more than ₹ 100 crore of its own capital to a ₹ 2,000 crore private equity fund.
Mettle Capital's sponsor commitment
Mettle Capital, founded by former Peak XV managing directors, plans a sponsor commitment well above the minimum for its ₹ 3,000 crore maiden fund.
Why larger commitments help
A bigger sponsor commitment signals willingness to share financial risks, strengthening limited partners' confidence in fund performance.
EY report on fundraising growth
In the first half of 2026, 48 funds raised $21.17 billion, more than double the $10.14 billion raised by 55 funds in the year-ago period.
Sebi's minimum commitment rule
Sebi mandates a minimum sponsor commitment of ₹ 5 crore or 2.5% of the fund corpus, whichever is lower.
LPs and fund managers' roles
Limited partners provide capital but leave investment decisions to fund managers, known as general partners (GPs).
Fresh funds in India
Several Indian VC and PE firms are raising or planning fresh funds, including ValueQuest Tristar, Waterbridge Ventures and Lightspeed India.
Multiple fund vintages help
For established firms, capital from earlier funds helps finance commitments to subsequent vehicles as the number of fund vintages grows.
Newer managers need proof
Newer fund managers use larger commitments to demonstrate conviction in their investment strategies to LPs.
Risks of large commitments
A large personal stake can create a sense of entitlement and risk turning the business into a family office.
What to remember
Indian fund managers are putting more of their own money into funds to build trust with limited partners amid rising concerns over fund performance.
