Narayan Seshadri

Seshadri was late, after an earlier meeting started an hour later than scheduled. He’s been manically busy these days, closing deals and raising funds for his two-year-old twin babies—Halcyon Enterprises and Halcyon Resources & Management Consulting. The first is a company that invests in distressed assets. The second, a management company that, well, manages the companies that have been invested in and tries to turn them around. Seshadri was among the earliest private sector finance professionals to spot the opportunity in buying out troubled companies and fixing them.

Halcyon’s first investment was in Baroda Rayon, a few months after the firm was formed in September 2004. “The factory was overrun with weeds and animals when we first went to see it," he says. So how did it feel to face the dust and grime of a failing company, a far cry from the rarefied world of management consulting that he had left behind? “You know I started my career with a small company in Bangalore that made high density polythene bags. So I had seen all this before. I had stood on the shop-floor before." That was one homecoming, though a metaphorical one.

As we slowly consume the kebabs and assorted artery-blockers that Indian bars tempt their clientele with, Seshadri recounts those days with the polythene bag company. They were an eye-opener in a depressing way. He remembers having to deal with corruption at all levels—from the government labs that had to certify the product to the senior bureaucrats who would not clear purchase orders till they got their bribes. “I was fed up. I decided to leave the country."

In 1984, he moved out to join KPMG, first in the West Asia and then in London. But he kept a watch on what was happening back home. “I saw what people like Rajiv Gandhi and Sam Pitroda were trying to do," he says, as we signal for another round of small whiskeys. Narayan had the option of moving on to KPMG’s office in Hungary, but he decided not to take the offer. He was back in Mumbai in 1991, a year that was a turning point for both him and the country. He joined Arthur Andersen in its consulting practice. Homecoming.

Then came the infamous securities scam of 1992. Harshad Mehta systematically siphoned money out of bank treasuries to fund his stock market adventures. One of the banks was Standard Chartered. Its senior managers, with their gin-and-tonic-and-gymkhana routines, had little clue about what the boys in treasury were really up to. The potential losses ran into hundreds of crores, and Arthur Andersen was brought in to sort out the mess for a fat fee. Narayan was asked to roll up his sleeves and help Standard Chartered Bank sort out the muddle. “That was my big break, though it was built on the misfortune of others," he says.

Narayan rose to head Andersen’s consulting practice, and all seemed to be going well for him till two fateful events overtook his life. Andersen collapsed in the aftermath of the Enron scandal in the US. Narayan was responsible for 130 young professionals in India. “I had to find them a home," he says. He merged his part of the practice with KPMG. And stayed with the group till this new outpost in the KPMG empire became profitable.

We journalists have often heard stories about how the other big merger—between Andersen’s tax practice and Ernst & Young—was acrimonious. Most of the senior Andersen partners eventually left the merged firm. Narayan says his decision to leave KPMG was for an altogether different set of reasons. “I wanted to get out of the constraints of a large organisation and do something on my own," he says.

Meanwhile, there was a far more serious setback. Narayan had to take time off to help his wife in her losing battle against cancer. Anuradha was an information officer with the government. Her passion was using the government information system to help citizens, and he has made this his passion as well. Narayan remembers accompanying Anuradha once to Karad, a small town in Maharashtra’s prosperous sugar belt and the constituency of Sonia Gandhi confidant Prithviraj Chauhan. “Anu had made a multimedia presentation to educate citizens about their rights," he says.

Halcyon was also set up. Abhay Soi, also from Andersen, was with him from the very beginning. “It was an exciting time—but only in hindsight. There were the regular trials and tribulations of a start-up. We had no support. There were just the two of us. We did everything, from taking calls to booking tickets to getting our visiting cards printed. I sometimes wondered whether I was being foolish in leaving the comfort of a large organisation," he says.

Then the market changed, as he sportingly reminds me. The economic boom helped Halcyon take wing. Others joined in, a few of them from Andersen and some from consultancies like Stern Stewart. The most recent addition to the Halcyon team is Munesh Khanna, Narayan’s friend from his Andersen days. Munesh headed investment banking at the old firm. Another homecoming.

The first investment in Baroda Rayon has been a success. There have been investments in two other companies, what Narayan calls “turn-up situations"—essentially providing growth capital. The Halcyon team has been on the road to close a fund that it will manage for foreign investors who want to buy into “special situations"—be it turnarounds or distressed debt or growth companies.

Any regrets? Does he, for example, find less time for the intellectual pursuits that I know he loves? “You have to keep reading, because that is the way you grow. My working days are longer, so the only way out is to extend yourself to ensure that you have the time to read," says Narayan, as we step out into the pleasant January night in Mumbai, and head back to our respective homes.

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