Private equity funds seem to be hot with business houses and the latest to float one is the diversified Mahindra & Mahindra (M&M) group.
The group has formed an in-house private equity fund, Mahindra Partners, which will be the group's growth driver in the future according to Anand Mahindra, vice-chairman and managing director of M&M.
He said that Mahindra Partners would be different from conventional PEs in many ways.
Unlike other PE funds Mahindra Partners will not have specified earmarked funds, he said.
He added that typically PE funds face pressure on redemption, say after seven years but Mahindra Partners would be allowed more elbow room to scale up its start-ups and not 'pressured to get in and out of a business within a certain period of time.''diversified Mahindra group's experience with new ventures has convinced it of that traditionally external PE culture is not growth-inducive. He added that Club Mahindra took the group 8-9 years to achieve critical mass and an IPO.
He also questioned whether a corporate house would do better by simply mimicing a PE.
The real strength of a corporate group is management and institution building he added.
He added that henceforth Mahindra Partners would look after new business opportunities and determine potential to enter or not.
Source: Domain B