Home >companies >people >Akhil Gupta moves to non-executive role in Blackstone India reshuffle

Mumbai: Putting an end to months of speculation over a change in the top leadership of Blackstone Group LP’s India private equity (PE) operations, the investment firm on Monday moved its India head Akhil Gupta to a non- executive chairman role and named its managing directors Mathew Cyriac and Amit Dixit as co-heads for the country’s PE operations.

The change in Blackstone’s leadership comes at a time when there has been a sharp decline in the value of its investments in a few listed firms. In India, Blackstone has a team of 19 investment and portfolio operations professionals in private equity and nine professionals in real estate. It has invested $1.7 billion in 20 private equity transactions over the last eight years to become one of the most active investors in the Indian market.

To be sure, the value of Blackstone’s investment in Bangalore-based garment exporter Gokaldas Exports Ltd has plunged by over 79.4%. In 2007, when Blackstone acquired control, the PE firm paid 275 per share. On Monday, Gokaldas Exports’ stock closed at 56.70 on BSE.

In September, Blackstone marked down the value of its $48 million investment in Financial Technologies (India) Ltd to 20 cents on the dollar, according to letters sent to its investors, Financial Times said in a report on 11 December. An associated $39 million investment in Multi Commodities Exchange, part of the same group, was also reduced by 40 cents on the dollar, the Financial Times report said. The stock price of its investee company VIP Industries Ltd fell by more than 56% in the last two years. VIP Industries stock was trading around 129 in March 2011, when Blackstone invested in it. On Monday, it closed at 56.15 on the BSE.

Gupta had set up Blackstone’s Indian operations in 2005 and is on the board of companies like Allcargo Logistics Ltd, NCC Ltd, Moser Baer Projects Pvt. Ltd and Jagran Media Network Investment Pvt. Ltd. In the new role, Gupta will continue to help Blackstone’s activities in India, working closely with the heads of its businesses.

“In my new stewardship role, I will continue to work with outstanding professionals of Blackstone, to be part of their continuing success, and also afford the time and flexibility to pursue my wider and global interests including academics and philanthropy," Gupta said in a statement.

Another deal maker said a change in the top management of a fund can create disturbances if the person who is moving on is a “key" person in the fund. Typically, these “key" people are the main fund managers who approach investors (called limited partners, or LPs) and raise capital on the back of their own track record, expertise and commitments. “Blackstone is a global fund. Cyriac and Dixit were as involved in the investments, if not more. It would not change anything dramatically for the portfolio firms," he said, requesting anonymity.

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