Mumbai: Next month, 18-odd private equity (PE) professionals who make up Washington DC-headquartered Carlyle Group LLC’s Asia investment team will troop down to Kumarakom in Kerala for the firm’s annual brainstorming meet.
This is the first time India will play host to the event and it underscores the importance the PE firm, which has $58.5 billion (Rs2.36 trillion) under management, attached to this market.
India is one of the firm’s key markets for investments from its $680 million Asia Growth Partners III fund, which has done two deals since its launch in 2005—Claris Lifesciences Ltd and Elitecore Technologies Ltd, both based in Ahmedabad.
The Asia growth fund invests primarily in four markets—China, India, Korea and Japan.
“India and China will constitute 65-70% of the investments from this fund. Investments in China may be marginally higher,” said M. Shankar Narayanan, managing director, Carlyle India Advisors Pvt. Ltd.
The firm will drive investments in sectors such as generic pharma, auto ancillaries, textiles, retail and health care.
Deal sizes will range between $25 million and $50 million though the firm is not averse to doing $10 million deals as well.
While Carlyle has a clear focus on growth deals, it may also do small-cap buyout deals occassionally.
“We could take a stake anywhere between 10% and 100%,” said Narayanan.
The growth fund is one half of Carlyle’s investment game plan for India.
The $1.8 billion Carlyle Asia Partners II LP fund that focuses on buyout deals in the region also invests in the country.
Former DSP Merrill Lynch M&A specialist Rajeev Gupta leads the India buyouts team. The fund has done one deal so far. It has picked up 5.6% stake in Indian mortgage major Housing Development and Finance Corp. Ltd for Rs2,638.35 crore.
The buyout fund has a seven-member investment team, while the growth fund has four people, excluding Narayanan.
Carlyle has been an investor in India since 2000 and its portfolio of past investments includes SSKI Investor Services Pvt. Ltd in Mumbai and Quality Engineering and Software Technologies (QuEST) and Worldzen Holdings Ltd in Bangalore.
Prior to 2005, it had invested here from the $159 million Carlyle Asia Venture Partners I LP fund, launched in 2000,and the $164 million Carlyle Asia Venture Partners II LP fund, which started investing in 2001.
Both funds focused on early-stage technology companies in India and elsewhere in the region.
The firm’s focus shifted to growth investments with a broader sector focus in 2004, just ahead of the launch of the $680 million fund.
Among peers in India, firms such as General Atlantic, Warburg Pincus, Actis Capital and Citigroup Venture Capital started investing in India around the same time.