Mumbai: Vikram Gandhi, former vice-chairman of investment banking and global head of the financial institutions group at Credit Suisse, is setting up an investment bank— VSG Capital Advisors.

The Delhi-based firm will handle domestic and cross-border deals and advise high networth individuals and global institutional investors such as pension funds and sovereign wealth funds (SWFs) which are looking to increase their allocation to India.

In addition, the firm will also look to advise on investments in the social sector.

Before working for Credit Suisse, Gandhi spent at least 15 years with Morgan Stanley in different roles, including global head of institutional strategy, head of the financial institutions group and president and country head of Morgan Stanley in India.

New start: Vikram Gandhi.

Some of the targets for such investments include infrastructure, real estate and large private sector projects, Gandhi added.

According Muneesh Chawla, managing director of Blue River Capital Advisors (India) Ltd, a Mumbai-based private equity (PE) firm, SWFs and pension funds today are looking to increase their allocation to India through direct investments.

“Also, they are looking to invest in not just equity but across different areas like capital markets, debt and infrastructure bonds," he said.

Typically, SWFs and pension funds invest through PE funds. Some of the SWFs that actively invest in India include Temasek Holdings, Government of Singapore Investment Corp. Pvt. Ltd, Khazanah Nasional Bhd and Abu Dhabi Investment Authority.

VSG Capital Advisors will also look to enter into partnerships with boutique investment banks and global funds. “In the next three-four weeks, we will announce one of these partnerships," said Gandhi.

Increasingly, many executives from large investment banks are looking to set up their own outfits.

Last month, Varun Bajpai, former chief executive of SBI Macquarie Infrastructure Fund, set up an investment bank, Violet Arch Capital Advisors Pvt. Ltd, after quitting the fund. Violet Arch will raise a $500 million, sector-agnostic PE fund.

According to Gandhi, capital-intensive sectors such as infrastructure have opened up for investment, attracting global investors.

Foreign companies acquired majority stakes in 131 Indian companies in 2011, registering a 30% rise in such transactions compared with the previous year, according to a study by Venture Intelligence, a research service focused on PE and mergers and acquisitions (M&A) transaction activity in India.

Of these inbound deals, 65 had an announced value of $9.99 billion.

In comparison, 2010 witnessed 101 inbound deals, of which there were 50 transactions with announced values totalling almost $8.4 billion.

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