Trikona Capital ends deal with Indian advisers

Trikona Trinity Capital, the Alternative Investment Market (AIM)-listed real estate fund, has terminated the contract with its India advisers, Trikona Advisors.

In a filing with AIM, Trikona Capital said it had terminated the portfolio management agreement (PMA) with its advisers due to violations of terms.

AIM is a sub-market of the London Stock Exchange with looser regulations.

Trikona Trinity is in the process of appointing advisers in Mumbai and New Delhi to assist the fund in administrating, monitoring and protecting its investments in India in the short-term in a manner consistent with the PMA.

Meanwhile, the company is seeking to terminate, through its subsidiaries and investee companies, all contracts in India with companies related to Trikona Advisors and its shareholders. Some firms in which Trikona Advisors has invested are Pipavav Shipyard, Fortis Healthcare, Rustomjee Township, Uppal IT Park and DB Realty.

Trikona Trinity is also inviting proposals from other fund managers active in India to manage and realise the company’s investments after the termination date. Its current portfolio assets are worth £250 million (Rs 1,893 crore).

Ashish Kalra, managing partner of Trikona Capital did not comment on the issue. But a source close to the development on condition of anonymity said, “it is too early to respond on this. He is in discussion with lawyers and will come up with an appropriate responses.”

Earlier this year, Trikona Advisors had run into problems with some of its hedge fund investors. Trikona Trinity was listed on AIM in 2006 and had raised £250 million to invest in India’s real estate sector. The proceeds of the placing were fully invested within 12 months. To date, the group has made 17 investments.

Meanwhile, Trikona Trinity Capital has started to sell stakes in some of the companies. For instance, it sold its investment in Phoenix Mills (PML) on November 9. The company sold the shares for £3.9 million (Rs 29.6 crore), approximately £3.4 million (Rs 25.8 crore) less than what it had paid for buying the shares in June 2007.