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Peak XV cuts latest fund size by 16%; drops fees on growth funds

Investor Announcement   Economic Times  

Peak XV Partners, formerly Sequoia Capital India, is to reduce the size of its USD 2.85 Billion fund India- and Southeast Asia-dedicated fund by 16% It will also reduce the “carry” (profit share charged to charges its limited partners or LPs) on its growth- and multi-stage investments.Announced in 2022, Fund-VIII was intending to invest USD 2 Billion across its India venture and growth investments, while the remaining was meant for deployment in Southeast Asia.The bulk of the reduction is to be in the firm's growth-stage allocation in India. "In the context of a richly priced public market in India, we are investing in a measured manner in our growth fund, while we continue to lean in on seed and venture stage opportunities,” Peak XV said in a statement posted on its Twitter handle.Peak XV Partners will also reportedly reduce the management fee it charges to 2.0% from 2.5% of the overall fund size. The carry on growth investments are reportedly being reduced to 20% (which is more of the industry standard) from the current 30%. (However, a 30% carry will get triggered if a given fund in the growth or multistage category achieves a 3X DPI or distribution to paid-in capital). The changes will be applicable to all ongoing growth funds of Peak XV Partners and previous Sequoia Capital India vehicles. The management fee and carry will remain unchanged at 2.5% and 30% respectively for seed and early-stage venture investments.