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January 30, 2011

Crunching Food Court Numbers

From the article in Businessworld:



The young and the restless view it as a “cool” place to hang out. Poovili Manan, a commerce graduate from Chennai, says it “allows us to experience different brands (of foods) each time”. You can take your pick of the fare on offer — Chinese, Italian, south or north Indian or blends such as Arabic and Continental. Or hang out at “brands” — McDonald’s, or a KFC. There is something out here for the silver-haired, too. For them, it is less about food brand, and more about a sense of the community.

Now to the food court math. “The revenue from food courts in our malls is commensurate with the area it has as a percentage of the overall mall. That is about 8-10 per cent of the overall leasable area. And revenues are the same in terms of contribution,” says Arindam Kunar, mall head and vice-president, DLF Place Saket in Delhi. The national capital is an exception — food courts generate nearly 15 per cent of a mall’s revenues due to extremes of weather. Many throng a mall during the city’s biting winters and sweltering summers. Some end up having two meals during a six-hour walkabout.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

Food TV Channels: How will they fare?

From the Businessworld article:

The first to launch was Zee Khana Khazana about six weeks ago on the company’s DTH platform Dish TV. In a launch interview, business head of Zee Khana Khazana, Anurag Bedi, underlined the importance of food to the Indian viewer, calling it “one of the three non-communal religions after Bollywood and cricket”. The 24-hour food channel has on offer both Indian culinary programmes like A Touch of Turmeric as well as taking housewives through recipes with chefs on the international circuit like the Chinese food show Ching’s Kitchen.

For content-producing company Alva Brothers, a food channel became a matter of necessity. The company’s foray into broadcasting with a Hindi entertainment channel, Real, came a cropper last year. Shutting it down, the group has morphed its broadcasting plans into a slew of lifestyle channels. The first offering from the Real Lifestyle Network will be ‘Food First’, expected to be on air in the next couple of weeks. Says Manisha Tripathi, business head of Real Global Broadcasting: “Food is universal in appeal and is increasingly becoming an expression of one’s lifestyle. Therefore the first launch.”

An interesting challenger to the other two will be ‘Food Food’, launched on 24 January as a joint venture by Astro Malaysia and celebrity chef Sanjeev Kapoor. The latter was for years the front face of the longest-running food show Khana Khazana on Zee TV. “We will not just be a stand-and-stir channel like the others. Ours will be a food and lifestyle channel with ‘where-to-eat’ shows, voyeurism on what and how the stars eat, and even travelogues,” says Karthik Lakshminarayan, COO of Food Food.


Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

January 28, 2011

AZB & Partners, Ernst & Young Top the League Tables for 2010

Corporate law firm AZB & Partners has topped the Venture Intelligence India League Tables for 2010 as the Most Active Legal Advisor for both Private Equity and M&A deals. AZB advised a total of 90 transactions during the period. Ernst & Young – which advised a total of 34 qualifying transactions - topped the League Tables as the Most Active Transaction Advisor (both PE and M&A) for the year.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on volume of PE and M&A transactions advised by Transaction and Legal Advisory firms.

Private Equity Deals

Among PE transactions, AZB advised 43 deals worth over $2.2 billion during 2010 including SBI-Macquarie’s $304 million investment in Viom Networks; the $217 million investment by Standard Chartered PE, KKR and New Silk Route in Coffee Day Resorts; and the $175 million investment by Temasek into National Stock Exchange. Other legal advisors who advised a significant number of PE transactions during 2010 include ALMT Legal (19), Indus Law (19), DSK Legal (15), Tatva Legal (15), Amarchand & Mangaldas (13), Trilegal (12), J Sagar Associates (11) and Rajani Associates (11).

Ernst & Young advised 8 PE deals worth $318 million during the period, including Bain Capital and TPG Growth's $86 million investment in Lilliput Kidswear; Warburg Pincus’ $85 million investment in Metropolis Healthcare and Actis' $78 million investment in Tata Realty and Infrastructure's road project SPV. Other transaction advisors who advised a significant number of PE deals during 2010 include Avendus (6), Intellecap (6), MAPE (6), Veda Corporate Advisors (6) followed by Edelweiss Capital, Grameen Capital and o3 Capital with 5 deals each.

M&A deals


Among M&A transactions, AZB advised 47 deals worth almost $22.5 billion during the period, including the Bharti’s acquisition of Zain’s African operations, Vedanta Resources’ acquisition of Cairn India and Jindal Steel’s acquisition of Oman based Shahdeed Iron & Steel. Other legal advisors who advised a significant number of M&A transactions during 2010 include Trilegal (16), Tatva Legal (17), Khaitan & Co. (14), Amarchand & Mangaldas (13), Rajani Associates (11), Nishith Desai Associates (9) and J Sagar Associates (8).

Ernst & Young advised 26 M&A deals worth almost $18 billion during the period, including GTL’s acquisition of Aircel’s tower business, Kalanidhi Maran’s bid for SpiceJet and Bharti’s acquisition of Zain’s African operations. Other transaction advisors who had advised a significant number of M&A deals during 2010 include Deloitte (16), BMR Advisors (11), Avendus (10), ICICI Bank (9) and Kotak (10).

The full league tables can be viewed online at http://ventureintelligence.in/league.htm

January 23, 2011

The Rush for Group Buying

Group buying, local search engines and education are the new mantras of success on the Web, says a Businessworld article.
Group buying sites offer deals at heavy discounts, getting mass volume for them. Though it is new to India, group buying has been growing in the US for some time. For instance, US website GroupOn started by offering 50-90 per cent discount. Some of the prominent group-buying websites in India are Mydala, Koovs, Snapdeal and Dealsforyou. For Mydala, discounts go up to 70 per cent.

For instance, one merchant gave a 93 per cent discount for a tattoo. Undoubtedly, a great deal for the customers, but what does the merchant gain? Simple. He gets hundreds of customers in a matter of days.

Verticals that have picked up a lot of traction are highly popular among the younger generation. Think restaurants, salons and recreation such as weekend getaways. “One weekend, we had a cruise package as a deal and it sold so much that we had to do multiple cruise bookings,” says Kunal Bahl, founder and CEO of Snapdeal.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

The dotcom survivors

From the Businessworld article:



Another dotcom entrepreneur who decided to stick it out is Dinesh Agarwal, founder of Indiamart.com, a venture started in 1996. Though the firm posted revenues of only Rs 90 crore in 2009-10, its valuation is around Rs 600 crore. Indiamart is a business-to-business (B2B) portal focusing solely on the SME (small and medium enterprises) sector. Over the years, it has built a huge portfolio of customers. In 2001, it had 50,000 firms on the site selling products and by 2004, this number rose to 300,000.

What Agarwal did was to build an ecosystem. Even today, 97 per cent of products and firms on the site are unpaid. But space priority is given to paid vendors — the upper half of the page is for them. As Agarwal adds more categories to the existing 40,000 and the number of products and companies are increased, the ratio between paid and unpaid vendors might change. Paid vendors may increase to 8-10 per cent.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

The Next Generation of Indian Real Estate

Businessworld has a feature on the generational changes among business families in the Indian Real Estate business.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

January 20, 2011

Speaker Lineup for APEX '11 PE/VC Summit & Awards

We are delighted to announce a stellar list of speakers for APEX '11, the annual conclave of the Indian Private Equity / Venture Capital industry, scheduled for February 9-10 at Mumbai.

Apex'11 Awards (evening of Feb.9)

Special Guest: Gurcharan Das, Noted Author and Former-CEO of P&G India

P.R. Srinivasan, CEO, Exponentia Capital
A.K.Purwar, Chairman, IndiaVenture
Vinod Dham, Managing Director, IndoUS Ventures
Paresh Vaish, Managing Director, Alvarez & Marsal India


Apex'11 Summit (Day long on Feb.10)


Private Equity: The Road Ahead


Raja Kumar, Founder & CEO, Ascent Capital
Alok Gupta, Managing Director - India, Headland Capital
K Srinivas, Managing Partner, BTS India*
Al Lakhani, Managing Director, Alvarez & Marsal India
Vishal Gandhi, Partner, Gandhi & Associates
Anu Parthasarathy, CEO, Global Executive Talent


Cleantech Panel

Dr. Vivek Tandon, Co-Founder, Aloe Private Equity
Inderpreet Wadhwa, CEO, Azure Power
Vinod Kala, Managing Director, Emergent Ventures
Siddhartha Das, General Partner, Ventureast


Logistics & Transportation Panel

Ashis Nain, MD, Expressit Logistics Worldwide
KK Iyer, MD, India Equity Partners
Sankalp Shukla, CEO, Inlogistics
Manish Saigal, Partner, KPMG
Mohit Bhatnagar, MD, Sequoia Capital India


Real Estate Panel


Jay Jegannathan, Abner Capital
Sunil Rohokale, ED, ASK Investment Holdings
Sanjeev Dasgupta, President, ICICI Venture*
Prem Rajani, Managing Partner, Rajani Associates
P. S. Jayakumar, MD, VBHC


To view the more detailed event agenda Click Here

To request participation details, Click Here

PE investments in 2010 almost double to $7.9-B

Highlights from the Venture Intelligence Indian 2010 Annual Private Equity Roundup Report

Private Equity firms invested $7,974 million over 325 deals in India during the 12 months ending December 2010, compared to $4,068 million across 290 deals during the previous year, according to analysis by Venture Intelligence, a research service focused on Private Equity and M&A activity. (These figures include VC investments and exclude PE investments in Real Estate.)

“After a volatile 3 year period, PE investment activity in 2010 reverts to the levels of 2006 (which had witnessed 358 investments worth $7,485 million),” pointed out Arun Natarajan, CEO of Venture Intelligence. “The really exciting feature of 2010 was on the exits side where activity vaulted to all time high levels with 121 transactions, including 24 via IPOs,” he added.

Top Investments

The largest investment reported during the year was the $425 million raised by power generation firm Asian Genco from investors including General Atlantic, Goldman Sachs, Morgan Stanley, Everstone and Norwest.

Infrastructure fund SBI-Macquarie’s $304 million commitment to independent telecom tower infrastructure firm Viom Networks (formerly Quippo Telecom) was the next largest investment. The third spot was share by two $300 million investments – one by Blackstone into an unlisted renewable power generation firm of the Moser Baer Group and another by Quadrangle Capital Partners into telecom towers firm Towervision India.

GVK Energy, a wholly owned subsidiary of Hyderabad-based listed firm GVK Power & Infrastructure, received commitments for about $422 million (Rs. 1,898 crores) from the infrastructure arms of two UK-based PE investors - Actis and 3i.

By Industry

With 34 investments worth about $2,141 million, Energy companies topped in terms of investment value during 2010, while Information Technology and IT-Enabled Services (IT & ITES) with 79 investments worth $696 million topped in terms of volume. BFSI with 44 investments worth $1,054 million came second on both parameters.

By Stage

Late Stage deals accounted for 34% of the investments in volume terms and 50% in value terms during 2010. Venture Capital investments accounted for 36% in volume terms and 8% in value terms, while buyouts represented less than 3% of the pie in both parameters. Listed company investments accounted for just 10% of the value of the PE pie (11% by volume) during 2010.

By Region

For the second year running in 2010, companies based in South India attracted the maximum PE capital both in terms of volume and value. Whereas companies from Western India ranked second in terms of the number of investments attracted, North-based companies received slightly higher share of the value.

Among cities, Mumbai based companies retained the top slot attracting 68 PE investments worth $1,590 million, followed by Delhi with 60 investments worth $1,025 million. Bangalore-based companies attracted $1,025 million across 53 deals.

Most Active Firms

With 25 investments during 2010, IFC – the World Bank’s private investment arm - continued to remain the most active PE investor in India during 2010. IFC was especially active in the Energy and BFSI industries. Sequoia Capital India with 15 investments (including 8 in IT & ITES companies) during the year was the second most active investor. VC firm Nexus Ventures followed with 10 investments during 2010. Apart from IT, Nexus also focused on Agri-business and Cleantech companies.

The value charts for the year, outside of infrastructure funds, were topped by Blackstone and Temasek. KKR, which apart from equity investments has actively begun to provide structured debt funding to the promoters of various large business groups, was another big ticket investor that made its mark in 2010.

Liquidity Events

Private Equity firms obtained exit routes for their investments in a record 121 companies during 2010, including 24 via IPOs. (2009 had witnessed 66 liquidity events including 7 via IPOs.) Including IPOs, each type of exit witnessed record high volumes in 2010.

PE-backed companies raised about $2.20 billion via IPOs during 2010. The $359 million raised by SKS Microfinance was the largest IPO by a PE-backed firm in 2010. PE investors in the company (not including pre-IPO placements) include Sequoia Capital India, Unitus, SVB, Sandstone Capital, Khosla Ventures and Kismet Capital. Other PE-backed companies that raised over $100 million via IPOs during 2010 included Orient Green Power, A2Z Maintenance & Engineering Services, IL&FS Transportation Networks, Hathway Cable, Ramky Infrastructure, Gujarat Pipavav Port and VA Tech Wabag.

The total value of M&A transactions providing exits to PE-investors during 2010 was around $5.3 billion. These included 36 sales via public markets, 30 strategic sales, 17 secondary transactions (involving sale of shares by one PE firm to another) and 13 buybacks (by either the company or its promoters).

Among exits via strategic sales, Actis and Sequoia Capital India exited OTC drug firm Paras Pharmaceuticals via sale to UK-based Reckitt Benckiser for $726 million. Paras, which reported sales of more than $89 million in the fiscal ended Mar-10, makes several over-the-counter medications, including Moov pain relief ointment, Krack heel care lotion and D'Cold cold remedy. Actis had held a 63% stake in Paras. In another significant exit via M&A, ICICI Venture sold specialty chemicals maker RFCL (formerly Ranbaxy Fine Chemicals), a company it bought five years ago, to US-based chemicals firm Avantor Performance Materials.

ChrysCapital’s reported $400 million sale of its holdings in IT Services firm Infosys Technologies (in which it had invested about $175 million in May-08) was among the most significant exits via Public Market Sales.

In the largest exit via secondary sale (sale by one PE investor to another) during 2010, ICICI Venture sold its stake in diagnostic services chain Metropolis Healthcare to Warburg Pincus in an $85 million deal.

About Venture Intelligence

Venture Intelligence, a division of Chennai, India-based TSJ Media Pvt. Ltd., is the leading provider of data and analysis on Private Equity and M&A transactions in India. For more information, please visit http://www.ventureintelligence.in

January 18, 2011

Interview with Raja Kumar of Ascent Capital


Raja Kumar, Founder & CEO of Ascent Capital

The growth capital focused PE firm Ascent Capital, recently invested Rs.150 crore in Hyderabad-based IVRCL Assets & Holdings. Earlier in 2010, Ascent had co-invested (with Argonaut and IDFC) into the energy arm of the GMR Group. Venture Intelligence spoke to Raja Kumar, Founder & CEO of Ascent Capital, about the latest investments and other developments at the Bangalore-headquartered firm.

Venture Intelligence: Can you tell us how the IVRCL Assets investment came about and what attracted you to the company?

Raja Kumar: Our internal research flagged water and road infrastructure assets as an attractive area to invest in during the fund life of our current fund. With the streamlining of regulations and good visibility of the upcoming road pipeline, the road segment is poised to grow. Water infrastructure is another promising area given the demographics of India. We dug deeper into these sectors and identified players whom we believe would be successful, IVRCL A & H was at the top of our list.

IVRCL is a proven player with significant experience and execution capabilities. They already have excellent assets in the Road and Water BOT space. The Company has the ability and balance sheet strength to raise capital at both the project and holding company level. They also have mature assets which they can easily divest to annuity type investors. Companies such as IVRCL are valued in the market at a multiple of book value and we have confidence in their ability to grow their book.

VI: What are you expecting from the company in the near future – in terms of use of the new funds, etc.?

RK: Majority of the new funds raised would be used to fund existing infrastructure projects. The company is also bidding on Road and Water BOT projects - we expect them to win some of the ultra mega road projects and water infrastructure projects given their experience in executing the water desalination plant in Chennai. To diversify the portfolio of projects, the company is now focusing on projects for power transmission, hydropower and oil tankages.

VI: Will Infrastructure continue to be a key investment theme for Ascent? What other sectors within infrastructure appeal the most to you?

RK: Infrastructure will continue to be a key investment theme for Ascent. Any fund that is looking to invest in India cannot ignore the infrastructure segment. The 12th Five Year Plan’s outlay of USD 1 trillion for the sector will drive investments. Other sectors within infrastructure that interest us are power, ports, logistics, urban renewal, etc. besides the companies that provide feeder services to infrastructure companies.

VI: Other than infrastructure, what are the other industries you are looking at actively?

RK: We are looking at sectors driven by domestic consumption such as Education, Healthcare, Managed Services, etc. We are also actively seeking opportunities that leverage the global competitiveness of the Indian industry such as IT/ITES, Aerospace & Defence Electronics, Pharmaceuticals & Life Sciences, etc.

VI: In Fund I and II, you had a significant number of investments in the IT space. What is your reading of opportunities in the IT & ITES industry now compared to earlier?

RK: We have done well with our IT investments in our previous funds and it will continue to be a focus area for our fund. Earlier, there were number of opportunities in the early stages, but now most of the opportunities are in roll-ups, management buyouts and platform development. Whereas the first phase of growth was driven by outsourced services this phase will be driven by product companies both in the software and hardware realm.

VI: What sectors will you stay away from?

RK: We stay away from real estate and other negative sectors such as alcohol, firearms and tobacco.

VI: Ascent has clearly stated its preference for growth capital. Why are you staying away from buyouts and distressed types of deals?

RK: Although we have a preference for growth capital, we are selectively looking at management buyouts and distressed opportunities. Even in growth capital we have always owned significant stakes in our portfolio companies and have been instrumental in setting the strategic direction of the company.

VI: What is your view on doing PIPE transactions?

RK: In the Indian markets, of the 6,000+ listed companies about 90% are characteristically akin to private companies with small revenues and profitability. Such companies need capital to grow and can be expected to produce returns comparable to those from private companies. If PE funds find cheaper valuations in the public markets than in the private markets they would prefer to do PIPEs. Having said that, I don’t think we are going to invest more than 20% of our corpus in PIPEs. Due to regulatory reasons we can do only primary investments in public companies.

VI: Your latest fund was closed in an extremely challenging environment for PE fund raising worldwide. Can you share some of the highlights from the experience?

RK: We were one of the few funds that launched and closed a fund on schedule during 2009. Needless to say it was an extremely challenging environment for fund raising. However, neither did we use the services of any fund arrangers nor did we have any special terms with our large LPs.

We are grateful to our LPs for backing us in 2009 – it was a leadership act on their part. It is interesting to note that ours was the only fresh commitment some of our LPs made during the year. Many LPs appreciated our discipline in adhering to the timeline for fund closure.

VI: Finally, you have attracted ChrysCapital founder Raj Kondur to the Ascent team. How did that come about and what role will Raj play?

RK: Raj is a welcome addition to our team and brings complementary skills. After a stint with entrepreneurship he was in touch with our team for the past 12 months. He clearly evinced interest to be part of the platform provided by Ascent Capital and help grow it to a leader in the industry. Raj will be leading investments like other partners with a special focus on control transactions.

This interview first appeared in the Venture Intelligence Indian 2010 Annual Private Equity Roundup Report

January 13, 2011

Deal Alert: NYLIM-JB Fund invests Rs.150-Cr in EPC firm PNC Infratech



Edited extracts from the Press Release:

Agra-based EPC (engineering, procurement and construction) and infrastructure development company PNC Infratech Limited (PNC) has received Rs.150 crores as an equity investment from NYLIM Jacob Ballas India Fund III, LLC (“NYLIM-JB Fund”), a Mauritius based Private Equity investor. PNC specializes in construction of highways, bridges, flyovers and airport runways, having built more than 1,000 km of highways and executed 17 airport runway projects till date
.

Commenting on the deal Mr. Pradeep Kumar Jain, Chairman and Managing Director of PNC said “The infusion of funds will help the company strengthen its balance sheet further, enabling it to bid for larger projects. PNC will use the funds to meet its capital expenditure and working capital requirements as also to part finance the equity contribution for its BOT projects to be developed in separate SPVs.”

Mr. Sunil Chawla, Partner, Jacob Ballas Capital India Pvt Ltd (“JBC”), investment advisor to NYLIM-JB Fund, said “Given the company’s track record and execution capabilities, we are confident that PNC will be able to get its fair share of the large highway construction opportunity in the country. The diversification into other areas of infrastructure will also start showing results in the next couple of years. NYLIM-JB Fund is extremely happy to partner with PNC and looks forward to being a part of the company’s continued success.”

Mr. Chawla has joined the Board of Directors of PNC.

Daiwa Capital Markets India Pvt Ltd, Mumbai, acted as advisor to PNC on this transaction.

About PNC Infratech Limited

PNC is an Agra-based Engineering, Procurement and Construction (“EPC”) services and infrastructure development company, specializing in construction of highways, bridges, flyovers and airport runways. The company is one of the leaders in the construction of airport runways and enjoys “SS” Class certification with Military Engineering Service (MES).

The company was founded by Mr. Pradeep Kumar Jain, Chairman, in 1999. PNC has successfully executed more than 35 infrastructure projects, of which 32 were executed independently. The company has till date built more than 1,000 kilometers of highways and executed 17 airport runway projects. PNC has recently diversified into solid waste management and power transmission projects. The company has a team of over 1,600 dedicated employees, including about 290 engineers and other professionals and finished the financial year 2009-10 with a turnover of Rs. 750 crores. PNC is currently executing more than 20 projects. These include the sole EPC contract for 126 km long 4/6 laning of Ghaziabad-Aligarh section of NH-91 in Uttar Pradesh and re-surfacing and extension of runway and allied works at AFS, Jorhat (Assam).

Moving up the value chain, PNC is taking the Public Private Partnership (PPP) route to become an infrastructure developer from being a pure play EPC contractor. The company is executing 2 highway BOT projects in joint venture and has been recently awarded 2 more BOT projects to be developed by its 100%-owned SPVs. The new BOT projects are the 107 km Gwalior-Etawah highway section of NH-92 awarded by Madhya Pradesh Road Development Corporation Limited and 123 km Kanpur – Kabrai section of NH-86 awarded by NHAI. In the coming years the company intends to consolidate its position as a high quality EPC company in various infrastructure verticals while simultaneously creating a healthy portfolio of infrastructure assets.
For more information, please visit www.pncinfratech.com.

About NYLIM-JB Fund

NYLIM Jacob Ballas India Fund III, LLC is a Mauritius-based fund with an investment objective of achieving long-term capital appreciation through equity or equity-related investments into companies based in or with significant operations in India. Previous investments by the Fund include Aster Teleservices Limited, Mahindra Holidays & Resorts India Limited, Saravana Global Energy Limited, Inventia Healthcare Limited, Financial Software and Systems Limited and SEW Infrastructure Limited. Affiliate funds of NYLIM-JB Fund have previously invested in a diverse range of sectors including telecom, ports, power, engineering construction, shipbuilding, real estate, textiles, auto components, IT consulting and printing.

About Jacob Ballas Capital India Pvt Ltd

Jacob Ballas Capital India Pvt. Ltd (“JBC”), based in New Delhi, is the investment advisor to three India focused private equity funds, New York Life International India Fund (Mauritius), LLC, New York Life Investment Management India Fund II LLC and NYLIM Jacob Ballas India Fund III, LLC. JBC’s ten member investment team has over 150 years of collective operating and investing experience, with over 50 years focused on private equity investments in India.

JBC was founded by Mr Rajan Jetley, Chairman, who is a well known professional and entrepreneur. Mr Jetley has previously served as CEO of Air India and India Tourism Development Corporation, and as Director of International Airports Authority of India. JBC’s shareholders, apart from Mr Jetley, include NYLCAP Holdings (Mauritius) which is wholly owned by New York Life Investment Management Holdings LLC, a wholly owned subsidiary of New York Life Insurance Company, Excelfin Pte Ltd, promoted by Mr B S Ong and Mr David Ban, reputed Asian entrepreneurs with extensive interests in property, retail and lifestyle businesses and the JBC senior management team, which includes Mr. Srinivas Chidambaram, Mr. Sunil Chawla Mr. Bharat Bakhshi and Mr. Anurag Kumar.

For more information please visit www.jbindia.co.in.

January 12, 2011

Limited Partner Interview: Paresh Thakker of Religare


Paresh Thakker, Head-Group M&A and MD-Global Asset Management, Religare

In 2010, the Delhi-headquartered Religare Enterprises Group acquired significant stakes in two US-based fund-of-fund houses to jumpstart its goal of building a Multi-Boutique Global Asset Management Platform. In February, Religare announced acquisition of controlling stake in Northgate Capital, a PE fund of funds which manages approximately $3 billion on behalf of more than 400 prominent institutional and high net worth families and individuals. In December, Religare announced signing of deal entailing acquisition of majority stake in Landmark Partners, a PE and Real Estate fund-of-funds focused on secondary transactions. Landmark manages ~$8.3 billion of assets.

Overall, Religare is aiming to acquire/partner with 8-10 affiliates/asset management companies over the next 3 years targeting an assets under management of $100 billion.

Venture Intelligence recently spoke to Paresh Thakker, who is responsible for leading Religare’s acquisitions and driving corporate strategy for its Global Asset Management business, including identifying and executing new investments, and working with affiliates on their growth plans.

Venture Intelligence: How will the two recent fund-of-funds acquisitions impact Religare’s investments in Indian PE/VC Funds?

Paresh Thakker:
Religare’s activities in Indian PE/VC funds would be through Northgate Capital and Landmark Partners. These firms will continue to pursue their fund of funds investments globally. India is an attractive PE/VC market and hence would form part of their strategy.

VI: How do you see the current fund raising environment in India?

PT:
Last 3 years have been challenging for PE/VC fund raising globally including India. As per market sources, PE funds raised for India is estimated at $9 billion in 2007, $4.5 billion in 2008, $4 billion in 2009 and $2.5 billion in 2010. It is estimated that funds focusing on India have dry powder in excess of $11 billion. Domestic institutional and retail investors are now more comfortable with PE and it’s a considerable market being already tapped by many funds.

VI:
What types of funds is Religare looking to investment in India?

PT: We would like to have at least a couple of our affiliates/partners in our Global Asset Management platform to be Indian firms. To that effect, we are currently evaluating a few deals.

VI: The sweet spot in India seems to be largely in the growth capital segment. Is this going to continue? What trends are you seeing in terms of new funds being raised?

PT:
Stage of life cycle of economy drives the nature of capital requirement. There are lot of mid and small size businesses in India requiring growth capital. Structurally, till we are in high growth phase, there would be robust demand for growth capital. However, the industry will need to find ways for firms to differentiate themselves by way of strategy, track record etc.

VI: Do you see buyouts continuing to remain a small segment of the market?

PT:
Yes, because of lack of opportunities in the buyout space. India's family-run and entrepreneur-driven firms have long been reluctant to sell out.

VI: Would you invest in Distressed Debt and Real Estate?

PT: Yes, we are evaluating opportunities in the same

VI: What is the biggest issue facing Indian private equity at the moment?

PT: Limited track record for most firms and availability of talent are a concern.


This interview first appeared in the Venture Intelligence Indian 2010 Annual Private Equity Roundup Report