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Morgan Stanley to set up PE unit in India

Morgan Stanley to set up PE unit in India
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First Published: Wed, Apr 23 2008. 11 38 PM IST

At the helm: The investment bank has hired Aluri Srinivasa Rao from ICICI Venture Funds Management Co. to head its unit in India. (Abhijit Bhatlekar / Mint)
At the helm: The investment bank has hired Aluri Srinivasa Rao from ICICI Venture Funds Management Co. to head its unit in India. (Abhijit Bhatlekar / Mint)
Updated: Wed, Apr 23 2008. 11 38 PM IST
Hong Kong /Mumbai: Morgan Stanley, the second biggest US securities firm, plans to set up a private equity unit in India, which attracted seven times more investments than China this year.
At the helm: The investment bank has hired Aluri Srinivasa Rao from ICICI Venture Funds Management Co. to head its unit in India. (Abhijit Bhatlekar / Mint)
The investment bank hired Aluri Srinivasa Rao from ICICI Venture Funds Management Co., a unit of ICICI Bank Ltd and India’s largest private equity fund, as a managing director, according to an emailed statement on Wednesday. Rao, 43, will run the New York-based group’s private equity investments in India, starting operations 1 May, the statement said.
Morgan Stanley will join Deutsche Bank AG in seeking investment opportunities in India, where private equity funds put in $4 billion through the quarter ended March, according to IndusView Advisors Pvt. Ltd. The global credit crisis, rising interest rates and a shrinking appetite for stock offerings have choked off the worldwide private equity industry’s main sources of profit this year.
“We are excited to be entering the India market,” Chin Chou, managing director and chief executive officer of Morgan Stanley Private Equity Asia, said in the statement. This year offers one of the most attractive times for investing capital in India, he said.
Private-equity investments in India rose 67% in the first quarter from $2.4 billion a year earlier, New Delhi-based IndusView Advisors said on Tuesday. China received $570 million, down 76%, said the India-focused advisory firm.
Deutsche Bank’s RREEF Unit, the world’s largest alternative investment manager, will make its entry in the real estate advisory business in India next week, a decade after it began operations in the region.
Morgan Stanley’s private equity unit will invest in India through its third fund dedicated to Asia, which manages $1.5 billion, the firm said. The securities firm also plans to start a private wealth management division in India this year.
Private equity funds are buying stakes in Indian firms as the government forecasts economic growth of about 8% for the year started 1 April. India attracted $10 billion of private equity investments last year, surpassing China’s $8 billion, IndusView said.
Announced buyouts globally plummeted 63% in the second half of 2007 to $200.8 billion from $542.0 billion in the first half, according to data compiled by Bloomberg. (Bloomberg)
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First Published: Wed, Apr 23 2008. 11 38 PM IST