February 2011
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HDFC to invest in Kaizen

Housing Development Finance Corporation, the country’s leading home mortgage provider, will invest in Kaizen asset management company, the manager for India’s first education-focused private equity fund, Kaizen Private Equity.

HDFC will invest in the education sector through its wholly owned subsidiary, HDFC Holdings Ltd, said a press release.

While the deal size was not disclosed, sources said HDFC would appoint an official on the board of Kaizen. HDFC will also get a share of profit of the asset management firm.

Kaizen asset management company plans to manage a $100-million target fund, which has commitments from leading international institutions. The fund achieved a first close in India in December 2010 and has used the proceeds to make its first investment in an undisclosed company, said the release.

“This partnership is complementary, as it leverages HDFC’s presence and strengths with the significant domain expertise provided by Kaizen’s in-house team,” said Sandeep Aneja, founder and managing director of Kaizen PE.

Kaizen would continue to enjoy independence in making investment decisions for Kaizen PE, as well as in the day to day management and operations of the asset management company, he said.

“Private equity investment in the education sector can catalyse entrepreneurship and support companies that wish to provide quality education at affordable prices”, said V S Rangan, executive director of HDFC.

India’s education sector market size is valued at $86.2 billion (Rs 3.9 lakh crore). While the government spends about $30 billion annually on the sector, the private sector spends about $43.2 bn.

Source: Business Standard

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