US-based private equity firm, Avenue Capital, have picked up a large chunk of the equity of the ambitious Rs 1,000 crore (US$ 200mn) Medicity project in Gurgaon.

Originally titled Medicity, the project is being called Institute of Integrated Medical Science & Holistic Therapies and is likely to begin operations by August 2007.

The brainchild of cardiologist turned entrepreneur, Naresh Trehan, the 45 acre plus project is being executed under a company called Global Health Ltd, and is likely to be the first of the three major medical projects coming up in Gurgaon. The other two projects are by Fortis Healthcare and Apollo Tyres.

While the exact amount of Avenue Capital’s investment is unknown, sources stated that it was valued to be similar to that picked up earlier by Punj Lloyd, which has bought 16% equity for Rs 138 crore (US$ 27.5 mn). Punj Lloyd is also constructing the project.

GE Medical Systems, the technology partner, had also picked up a small percentage of equity and would be providing high-end diagnostic tools, clinical research and development and utility services such as power generation and water treatment.

The 1,500-bed institute has been clinically modeled after global centres of excellence such as the John Hopkins and Mayo Clinic of the US. It also has a vast area designated for commercial establishments such as service apartments and hotels, to cater to the burgeoning medical tourism in Gurgaon.

EM Capital Management is raising three India-specific funds, of which two funds- worth US$ 200 mn each- are on their way to completion and will be launched in ’07.

Aimed to capture separate opportunities such as small companies, listed mid-cap companies and growing private Indian companies, EM Capital has, as CEO Seth Freeman puts it ,”no sectoral bias, we are looking for great companies with great management, capable of making money and outperforming the market. We strongly believe in the domestic story as well as India’s convergence as a global powerhouse.”

Specialising in turnaround management, asset management, realty advisory, distressed assets and M&A., in the US, EM Capital expects to launch several sector specific and thematic funds including “sustainable” and “distressed and under performing” by ‘07.

Dhruba Gupta, the former deputy treasurer of the International Monetary Fund in Washington, will be heading the Indian office, while all funds will be managed by a cross-border team based both in California and India under the direction of Robert Bell, the fund’s chief investment officer.

EM Capital however has plans for a larger investment management staff in India as compared to the US, with local employees accountable for generating ideas and rigorous company level due-diligence.

EM Capital currently operates in the US, Mexico, China, Russia and Africa along with emerging European countries.