PE fund managers shift base for global opportunities

Shift of top-level fund managers from Indian offices to their Asian offices at Singapore and Hong Kong and other global offices has been witnessed

The private equity sector in India is in the thick of action with the heads and key personnel at funds being shifted out of India, in order to grab better opportunities in other markets.

Instead of focusing on India, where the PE funds are bogged down by a host of issues, including the rupee depreciation and a lack of return for their investment, the funds now look at expanding their portfolio outside the country, where deals are available at better valuation. According to experts, high valuations and increasing competition in India cause delay in closing deals.

The past couple of months have seen the shift of top-level fund managers from Indian offices to their Asian offices at Singapore and Hong Kong and other global offices.

Vikram Hosangady, head of transaction services and private equity at KPMG India, said: “There is a definite trend of global funds increasing their exposure to south-east Asia and combining such focus with India due to reasons such as better utilisation of teams and proximity from a time-zone perspective.”

Everstone Capital, one of the India-focused PE funds, has seen founder and managing partner Sameer Sain move from its posh office in Mumbai to Singapore. Early this year, the fund had acquired Harry’s Holdings, a leading operator of premium lifestyle bars under the brand name Harry’s in Singapore for about Rs 100 crore.

According to an Everstone spokesperson, Sain was based in India during the initial years as Everstone was establishing its infrastructure, but he has been based in Singapore for the past three years as the firm increased its investments and headcount in other parts of Asia.

Sain said: “India still remains a substantial commitment for Everstone as we have over $1 billion invested in the country. But Everstone also has several investments outside India such as Harry’s, Faces Cosmetics and other consumer-related and energy assets. I think it is important to look at a firm’s resource base and commitment to India rather than individual movements as they can be a function of career-related moves or personal choices and do not necessarily have other implications.”

According to experts, PE investment opportunities are plenty outside India and neck-to-neck competition in India causes increase in valuation.

“Most importantly, some economies like Indonesia, Vietnam offer very interesting assets and are often far more reasonable than valuations in India,” Hosangady added.

Early this month, Praneet Singh, who headed the Mumbai office of Siguler Guff, a global fund with $10-billion worth assets under management, has moved to New York as part of expanding the fund’s investments in emerging market PE funds. On Praneet’s move, Kenneth Burns, managing director at Siguler Guff, said: “We continue to believe there are opportunities in India on a selective basis. We are also leveraging our experiences in India into other similar regional markets as we continue to expand Siguler Guff’s global emerging markets capabilities.”

Similarly, Naveen Wadhera, India head of Boston-based private equity major TA Associates, has also moved to Hong Kong to explore investment opportunities across Asian markets. Under his leadership, TA has made investments such as Micromax, Billdesk and Dr Lal Pathlabs in India.