CDC Group, the Development Finance Institution (DFI) that is wholly-owned by the UK Government’s Department for International Development, is looking to invest around $500 million in India through the private equity route. The fund which has had good exposure in India through the Fund of Funds route will now also be looking to invest directly in Indian businesses. A spokesperson for CDC Group said that they are looking to invest $1 billion over the next 4-5 years in India and the split will be more or less equally between the Fund of Funds route and the direct investments into Indian companies. “We have hired a senior private equity professional – Srinivasan Nagarajan as our Regional Director in India who will come on board during next year. He will be involved in direct investments into Indian companies and also continue the relationship with the investment community in India,” the spokesperson for CDC told Business Standard. The move to hire Nagarajan comes few months after CDC’s Asia MD – Anubha Shrivastava quit the company during early August. Nagarajan however is not a replacement for Anubha Shrivastava and CDC is expected to fill that position at the earliest. CDC’s direct thrust in Indian private equity sector is part of its recently announced strategy through which it will provide debt and direct investment to businesses as well as acting as a fund-of-funds investor.
CDC has net assets of £2.6 billion and invests in the developing countries of south Asia and Africa. CDC currently has capital at work in 152 funds managed by 80 fund managers and some of the prominent PE funds which are active in India are Actis, New Silk Route, Ascent Capital, Baring Private Equity Partners, India Value Fund Advisors, Multiples Investment Advisors among various others. The spokesperson for CDC added that they will continue to work with many private equity funds and will not be competing with them and many a times CDC may be co-investing as well. The push into India’s private equity industry by CDC comes at a time when many Indian and global PE funds are struggling to find investments and even if they have found some, it is proving to be difficult to find good exits. Sanjeev Krishan, Leader, Private Equity, PricewaterhouseCoopers India said the third quarter of 2012 was an important period in which the investor community felt both despair and hope. “Some positive-sounding policy announcements towards the end of the quarter hopefully lifted investor confidence. While that may not result in heightened deal activity in the near term, it may bring the focus back on growth and create enough opportunities for equity investors in the future. The Shome Committee recommendations have also been positively received by the investor community, and should the government continue to walk the talk, investor interest in India is bound to revive."