Buyout Funds Rush To India And China: Capital International Raises $2.25B Emerging Markets Fund

May 20, 2008 | by Shrija Agrawal

Capital International, the UK based buyout arm of the US-headquartered Capital Group, has closed a $2.25 billion emerging markets private equity fund to invest in countries like India, China, Russia and the markets in Latin America. The money has come in from more than 70 institutions, including the Pennsylvania Public School Employees’ Retirement System and Lockheed Martin Corp.
This is the fifth fund of Capital International (christened as Capital International Private Equity Fund V or CIPEF V), and is four times the corpus of its previous fund. The investments targeted will be in the range of of $50 million to $250 million in companies across various regions and industries. The fund has already committed more than 25 per cent of its capital in six companuies - including Arcos Dorados, McDonald’s restaurant operations across Latin America and Unimilk, the second-largest dairy products producer in Russia and Ukraine.

RBS Realigns Top Talent From ABN Amro; Barclays Too Tap Into ABN

May 20, 2008 | by Sahad P V

As India emerges as one of the top destinations for M&A practice in the world, there is a severe catfight going on for talent in the investment banking business. Royal Bank of Scotland (RBS), which acquired ABN Amro Bank last year, has hired three key people from the Dutch bank for Indian investment banking operations. At the same time, Barclays Capital poached five senior managers of ABN to head up their investment banking operations in the country and elsewhere.
RBS has appointed Manoj Agarwal as head of global corporate finance for India, Anjani Kumar as head of M&A operations, and Dilip Kadambi as head of equity capital markets business. This seems to be part of RBS’s integration process with the Dutch bank. So this is probably more like a realignment of work force.
Menon is currently based in Hong Kong, where he handles financial sponsors-led M&A advisory in Asia. Kumar moves from ABN’s M&A advisory group in London, while Kadambi currently works in ABN’s ECM business in India. Besides, RBS has also hired Varsha Valecha, who was a business leader in ABN’s India ECM team. Valecha has also worked with Enam Securities.

Zeus Numerix, IIT Bombay Incubated Firm, Gets $500K Seed Funding

May 19, 2008 | by Sahad P V

Zeus Numerix Pvt Ltd, an engineering design services company incubated at IIT Bombay, has received Rs 2 crore ($500,000) funding from a group of high-net worth individuals led by investment bank Saltrock Advisors Pvt Ltd. Zeus is founded by a group of IIT-B professors and students. The company has the backing of 10 years of R&D at Dept. of Aerospace, IIT Bombay.
Zeus was founded in August 2004, and it specialises in computational fluid dynamics (CFD) tools and services. It has a global customer base across a diverse set of industries, including aerodynamics, automobiles, missiles/rockets, nuclear reactors and buildings, electric fans & motors etc. The company owns a proprietary platform and series of intellectual property in this domain. According to a release issued by the company, Zeus Numerix had been profitable since its inception, and had risen from a revenue base of Rs 20 lakh in 2004-05 to Rs 2 crore in 2007-08.

Cobra Beer Uncorks Three-Year Exit Plan To Entice Investors. Any Takers?

May 19, 2008 | by Shrija Agrawal

Cobra Beer, the UK headquartered alcoholic beverages company founded and managed by the India-born British millionaire Karan Billimoria, may be sold lock, stock and barrel in the next three years, the UK’s Sunday Telegraph reported. This move was revealed in marketing documents of the company used to convince financial institutions to back the company. That would answer the question on exit route for private equity firms who are looking to invest in the firm.
According to the documents, a sale is expected in the next three years - a “full exit in 36 months”. And that could be a trade sale to one of the big brewers or drinks companies. The company has identified “obvious buyers” like South Africa’s SABMiller, Russia’s InBev (in which Delhi-based Sun Group is a shareholder), Molson Coors, Carlsberg and Anheuser-Busch, besides Heineken, and certain Indian-owned companies (Vijay Mallya’s Kingfisher, anyone?) also as “possible buyers”. Cobra has given the mandate to N M Rothschild and City Capital Corporation as advisors

KPMG’s Pradeep Udhas Joins Greater Pacific Capital As India MD

May 19, 2008 | by Sahad P V

A leading UK-based private equity firm, Greater Pacific Capital, has hired an investment banking veteran to head up its India office. Pradeep Udhas, one of the founding partners of KPMG India, has quit the consulting firm to join the PE fund, according to a report in The Economic Times. He will be one of the five managing directors of the London-based fund, and will be located in Mumbai.
Udhas joins the likes of Amit Chandra, Rajeev Gupta and Munesh Khanna who all left investment banking careers to join various global PE funds.

IL&FS Investsmart: SAIF Partners To Exit; Edelweiss Missed Out On The Deal

May 17, 2008 | by Sahad P V

Private equity fund SAIF Partners, which owns 12 per cent stake in IL&FS Investsmart, will exit the company through the open offer to abe announced by the acquirer HSBC Plc. The British banking giant, on Saturday announced that it would acquire 73.21 per cent stake in Mumbai retail broking firm IL&FS Investsmart for $241.6 million (at a price of Rs 200 per share). The sellers are the promoters of the company, E*Trade (43.85 per cent stake) and IL&FS (29.36 per cent). IL&FS will also get $19.4 million as three-year non-compete fee. HSBC is likely to announce the open offer for 20 per cent shares early next week. Sources told VC Circle SAIF Partners will participate in the tender process (open offer), which is expected to be announced next week.
SAIF Partners had acquired shares in IL&FS Investsmart at close to Rs 50 a share three or four years ago. The exit will give the PE fund about 4.5-5 X returns.

HSBC Buys Out E*Trade, IL&FS For $261M From Broking Firm IL&FS Investsmart

May 17, 2008 | by Pallavi S

In one of the largest M&A deals in the Indian broking space, HSBC has announced that it would acquire a 73.21 per cent stake of IL&FS Investsmart in an all-cash deal for $261 million (Rs 1,070 crore). IL&FS Investsmart is co-promoted by IL&FS and US online brokerage firm E*Trade, who have exited in the deal.
HSBC is acquiring the stake from both the key promoters. HSBC, via its subsidiaries, will acquire 43.85 per cent from E*Trade and a 29.36 per cent from IL&FS for $241.6 million at a price of Rs 200 per share. Besides the deal value, HSBC will also pay Mumbai-based IL&FS an additional $19.4 million as part of a three-year non-compete agreement. Since IL&FS Investsmart is a listed company, HSBC will have to make a mandatory open offer to acquire up to 20 per cent additional shares.
VC Circle was the first to report about E*Trade exiting the Indian broking house following a hit it took after the subprime crisis in theUS

Infrastructure Investing Turns Fashionable: Latest Entrant KKR

May 17, 2008 | by Sahad P V

As the global economy is still reeling under the subprime crisis, infrastructure investing is becoming fashionable globally. Soon after Morgan Stanley and Global Infrastructure Partners (a PE firm backed by Credit Suisse and General Electric) announced almost $10 billion worth funds for infrastructure, here is one of the largest PE firms in the world, Kohlberg Kravis Roberts & Co., announcing its entry into the business of investing in roads, bridges, ports and flyovers.
The New York-based firm said it would invest in infrastructure assets worldwide. It has also hired George Bilicic from investment bank Lazard to head up this initiative.
Bilicic has been quoted as saying by TheDeal.com that there is a need for deployment of capital in sectors including electric and gas utilities, water, transportation (including roads, bridges and tunnels), gas pipelines and airports. “Across the economy and across nations, there’s a fundamental need for this asset class,” Bilicic told the website. It’s not clear how much it will set aside for the infrastructur

Sequoia-Backed Sai Advantium Lands $20M From MPM Capital

May 17, 2008 | by Pallavi S

MPM Capital, the largest venture capital investor dedicated solely to healthcare, has made a $20 million investment in Hyderabad-based Sai Advantium Pharma, a chemistry-driven drug discovery and development service company. This is the first investment by MPM Capital in India.
As part of the deal, MPM Managing Director William Greene is joining Sai Advantium’s Board of Directors. In 2007, Sequoia Capital had picked up a minority stake in Sai with an investment of $12.5 million (as reported first by VC Circle) .
MPM intends to help the company tap biotech firms in its own network, besides big pharma companies with which it has strong relationships. The global preclinical discovery and development outsourcing industry is poised to grow to $20 billion by 2010.

loan wala.com

loan wala.com

Loan Origination Market Heating Up; Komli Launches LoanRaja.com

Probably this could be a wrong time to launch an online loan lead generation company like ApnaLoan.com. Interest rates are at the peak, and everyone is deferring plans to take on more debt. But that will not stop new such companies from entering the market. Online ad network Komli has launched LoanRaja.com, which collects loan leads from consumers and pass on to financial services companies at a fee. Early this month, BharatMatrimony (BM) Group also launched a company in this space - called LoanWala.com. This is the sixth website of BM, a consumer internet company funded by Yahoo and Silicon Valley-based venture capital fund Canaan Partners.

I asked Komli’s CEO Amar Goel why the company entered the consumer internet space through LoanRaja, while Komli is an advertising network that brings together publishers and advertisers. According to Goel, a good number of his advertising clients are financial services companies, and by launching LoanRaja, he will also get to sell them leads and not just eyeballs. “We are a marketing services company, after all.” Komli was recently funded by Helion Venture Partners and Draper Fisher Jurvetson.

While LoanRaja and LoanWala are the latest entrants, the space already has two other prominent players. Sometime last year, a Delhi-based startup had launched Deal4loans.com, which claims to be an online loan comparison site. Deal4Loans is, however, yet to make a splash about their presence.

But India’s first loan lead generation company was ApnaLoan.com, a product of 1999-2000, but now jointly owned by its founder Harshvardhan Roongta and Sequoia Capital India who bought out the earlier investors in the company. ApnaLoan - which sells leads for all financial products like credit cards and not just loans - had gone through a rough patch post-dotcom bust. The company is now back in the game. The loan origination market (including insurance products) is estimated at about Rs 1,500 crore currently. As for loans, the lead generation commission could be anywhere between 0.5 per cent to 1 per cent, while for health and auto insurance products it could be 5 per cent.