Mumbai: Wealth management company ASK group has formed a private equity (PE) venture with Pravi Capital Advisors LLP, a PE firm founded by former ICICI Venture executives, and plans to initially raise $200 million (around Rs 1,000 crore) to invest in companies that will benefit from rising income in Asia’s third largest economy.
The proposed fund’s average investment in a company will be $10-15 million, with the option to purchase as much as 80% stake.
ASK and Pravi will invest $2 million each in the joint venture ASK Pravi Capital Advisors Pvt. Ltd, said Mukarram Bhagat, executive director of ASK Investment Holdings, adding that they will be filing documents with the capital markets regulator Securities and Exchange Board of India in two weeks. Roadshows for raising the fund will begin later this month.
“We will look for companies that are already generating revenue of $10 million to $15 million and expect to triple them in four to five years’ time,” Bhagat said in a phone interview. The venture will focus on investing in privately held businesses that will benefit from growing consumption in India, he said.
While ASK Group will help in raising the fund, the day-to-day management of the venture will be handled by Pravi Capital. ASK group said the new venture complements their existing businesses including wealth advisory, portfolio management services and real estate fund management. “The partnership, while complementing our existing businesses, also helps us provide a comprehensive bouquet of wealth management solutions to our ultra-high-networth clients,” said Bhagat, adding that while ASK group brings on board its research-based asset management expertise and fund-raising capabilities, Pravi Capital founders have in-depth understanding of the PE business.
The fund plans to buy stakes of not less than 25% in small- and medium-sized firms, said Jayanta Banerjee, chief executive of ASK Pravi Capital Advisors.
“The intention is not to have small minority stakes but a significant ownership in fundamentally strong companies poised to benefit from demand guided by consumption themes.”
Raja Sujith, partner at law firm Majmudar and Co. said the alliance is a win-win situation for both partners.
“It is clear that half the work, i.e. fund-raising will be done by one partner, while the fund management will be done by the other partner who have substantial experience in the private equity investment field,” Sujith said. “With their (ASK group’s) direct involvement in an investment fund, even their ultra-high-networth clients will become more comfortable about the PE asset class. For ASK group, it would be an additional offering for their clients.”