New Delhi: Ashish Dhawan, the founder of private equity fund, ChrysCapital, has decided to step down from an active position at the firm to focus more on social issues, particularly education.
A Harvard Business School graduate, Dhawan is known across the private equity (PE) industry as a star fund raiser. Under his leadership, ChrysCapital currently manages $2 billion. Although the transition until his exit will be gradual, he will only lead the remaining team at ChrysCapital on investments made until July 2012, his expected time of departure.
“Nothing changes until July 2012. Even thereafter, I will continue to engage with any activities that pertain to any investment recommendations made till then,” he said in a release. ”I have full confidence in our ChrysCapital team and know that the firm will be in good hands after I leave. I plan to eventually focus my energy on not-for-profit K-12 education in India.”
The next fund, which will be the fund house’s sixth, will be raised with Dhawan’s assistance, and may launch by the middle of next year, more or less coinciding with the time of his departure. The last fund, which has only been partly deployed, has a total corpus of $969 million. ChrysCapital has more than 60 companies in its portfolio.
While the future fund’s size is set to decrease, it will continue to have the same sectoral focus. The responsibilities will be redistributed across the remaining six managers.
No one else at ChrysCapital, apart from Dhawan, is a ’key man,’ he said in an interview.
The key man clause is an element within the partnership agreement between PE investors and the fund manager which states that if employees designated as such cannot commit a required level of time to the partnership, that investment activity is halted.
The clause protects limited partners (LPs), the investors in a PE fund, in the event that key personnel leave.
ChrysCapital works in tandem with an advisory service based in Mauritius, ChrysCapital Investment Advisory, which recommends investments to a board of directors based on the Indian Ocean island that takes the final call on all of ChrysCapital’s investments. None of the current management team, apart from Dhawan, is on the committee or the board of directors.
“This is my training — my first job was investment banking and then I worked here. I studied economics and I went to business school. This is part of who I am. Am I going to miss it? Yes, but I am equally excited to do something new. This is not the case of being burnt out.
This is partly a personal challenge,” he said in an interview.