Rajaratnam started firm with ex-McKinsey chief

Raj Rajaratnam, the billionaire hedge-fund manager accused of insider trading, started an investment firm in 2006 with partners including Rajat Gupta, former head of McKinsey & Co, and Mark Schwartz, ex-chairman of Goldman Sachs Group Inc’s Asia business.

Rajaratnam’s role at Taj Capital, formed to manage hedge funds and private equity focused on South Asia, illustrates the breadth of his global business connections as he ran New York-based Galleon Group LLC. He cut ties with Taj Capital when the firm abandoned plans to start a hedge fund, another co-founder, Parag Saxena, said on Thursday in an interview.

The New York-based firm, renamed New Silk Route NSR Partners LLC, oversees $1.4 billion in private-equity investments, according to filings with the US Securities and Exchange Commission. Holdings include stakes in Hyderabad, India-based Aster Infrastructure Pvt Ltd, a provider of wireless-telecommunications towers, and Augere Ltd, a London-based developer of wireless broadband networks in emerging markets, according to New Silk Route’s website.

“It was envisioned to be a different business that included listed securities and unlisted securities,” said Saxena, who came to the US from India in 1977. Rajaratnam “separated himself from the management of the company” after initial fundraising fell short of target.

Gupta declined to comment. Telephone calls to Schwartz weren’t returned. Dan Gagnier, a Galleon spokesman, declined to comment. Gupta, Saxena and Schwartz haven’t been accused of wrongdoing or implicated in any way in the Galleon case.

Rajaratnam “has no management role in New Silk Route nor any ownership in the firm,” Rupa Ranganathan, a spokeswoman for the firm, said in an e-mail. “Neither New Silk Route nor any of its owners have any investment in Galleon.”