Capital Intl looks to invest in consumer firms

Capital International, the US money manager with more than $3 billion in alternative assets, is seeking to increase investments in Indian consumer-related companies after exiting two of its three holdings in the country this year.

The money manager’s private-equity funds that invest in emerging markets will focus on businesses in areas such as education, food and clothing, San Francisco-based James McGuigan, a partner at Capital International Private Equity Funds, said in an interview from New York yesterday.

“Emerging markets, or the rest of the world, generate some of the best-of-the-world opportunities,” McGuigan said. “Two-thirds of world gross domestic product (GDP) growth has come from emerging markets over the past 20 years and we expect it will be the case for the next 20 years.”

Private-equity investors are using gains in Indian stock prices to exit holdings after the benchmark Bombay Stock Exchange’s Sensitive Index more than doubled from this year’s low in March. Capital’s private-equity funds sold their entire stakes in Kingfisher Airlines in June and in MindTree, a computer services provider, this month.

In other recent sales, Clearwater Capital Partners Cyprus sold a stake in Diamond Power & Infrastructure, while Warburg Pincus International LLC sold stakes in Max India, stock exchange data showed.

‘Dramatic slowdown’
The Capital International Global Emerging Markets Private Equity Fund has drawn 36 per cent of $2.25 billion of funds committed, McGuigan said. It is looking at some deals worth $100 million and above globally over the next few months, he added.

“In the post-crisis environment, Asia including India and Latin America, is where we are seeing most of the late-stage activity in potential new investments pipeline in the coming months,” McGuigan said. “Private-equity fund raising has seen a dramatic slowdown, but the markets have stabilised globally and we expect it will pick up again slowly.”

Capital has a minority stake in Manipal Universal, which runs a medical school it bought in September 2006 for $38.5 million.

Capital International had over $171 billion in assets under management as of December 31, according to the company’s website. It bought a stake in Deccan Aviation, now owned by Kingfisher, part of India’s largest brewer, in March 2005. It acquired the MindTree stake in 2001.