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Kotak Investment Advisors, the alternate investment arm of the Kotak Mahindra group, is set to launch a $1 billion (Rs 4,000 crore) infrastructure fund. The group, which consolidated its alternate investment business, currently manages two private equity funds and three real estate funds. The infrastructure fund will invest in core assets like power and transportation, which includes roads, ports and airports. The funds will be raised in the first quarter of 2008-09. […] Though the roots of private equity (PE) lie in post-World War II America, the industry has come into its own in India only in the last few years. The PE industry here is growing steadily and global PE players such as Blackstone, Warburg Pincus, Temasek, and Sequoia are sharing space with Indian firms like ICICI Venture, Matrix Partners, Kotak, GW Capital and others. Most of these are lean companies. For example, ICICI Venture, which is one of the largest private equity firms in India, with funds under management in excess of $2 billion, has between 80 and 90 people on its staff. Others are much smaller, with core teams consisting of as few as 3-4 employees. And while the sector is bullish on growth and hiring prospects, there is one hitch that threatens to spoil the PE party. Private equity players in the country are concerned about the supply of trained manpower at operational (senior) levels. […] Delhi-based publishing house MBD Group is in talks with international private equity firms to offload equity in its mixed-use development MBD Zephyr in Bangalore, as it tries to raise funds in a nervous and choppy market. The mixed-use development, which is expected to be completed by 2011 will have a luxury hotel, space for luxury and premium retail, and entertainment spaces. The company is looking at offloading between 26% and 49% equity in the retail portion of Zephyr, which is spread over more than 80,000 sq. ft. “We have started sensing the market. We have been approached by some private equity funds,” said Sonica Malhotra, executive director, MBD. She did not say how much the company expected to raise from this divestment. The eight-acre MBD Zephyr project at Whitefield near Bangalore is targeting luxury brands such as Gucci, Versace, Louis Vuitton and premium ones such as Debenhams, Zara, Mango and Body Shop. Zephyr will also have a 450-room luxury hotel owned and managed by the MBD Group. […] Yatra Capital, the Euronext-quoted India-focused real estate fund, is in final round discussion with Parsvnath Developers (PDL) to pick up 30% stake in latter’s bus-terminal-cum -commercial complex project in Mumbai for around 220 crore. Sources said the fund has valued the Mumbai project at over Rs 700 crore. In 2006, PDL bagged the real estate project from BEST, the state government-owned transport and electric supply utility, to develop its surplus land in Kurla as a bus terminal-cum-commercial complex. The project has over of 40,000 sq ft developable area. […] Sequoia will invest up to Rs 120 crore in the rapidly growing garment retail business Nahar Retail. Better known by its brand name ‘Cotton County’, Nahar Retail attempts to do what very few have managed in India, build a profitable garment brand with an associated retail presence. To be fair to Nahar Retail, it has covered a lot of ground since its launch. Some reports suggest that it has 400-plus outlets in 300 cities. This is a massive reach. However, in retail, it is one thing to quickly expand reach. It is quite another to build a profitable business. The retailer has to ensure that a majority of the stores break even and become decently profitable. This requires ensuring foot falls, then conversion of those foot falls into sales. Not every attempt succeeds in this. Arvind Brands tried to build an aggressive retail presence about 6-8 years ago. It succeeded for a while, at least in establishing a large network. But then it rolled back most of that strategy within 2-3 years, which seems to suggest that most of the stores never reached breakeven. […] The Triangle Real Estate India Fund, established by Old Mutual Investment Group Property Investments (OMIGPI) and ICS Realty of India with the aim of achieving superior returns in the world’s fastest growing economy after China, has secured an investment pipeline of projects worth more than $400 million. The $500 million fund, which is due to open on March 31, is initially aiming to capitalise on the rapidly expanding organised retail market in India, says Colin Young (Pictured right), head of institutional property investments at OMIGPI. “Organised retail is wholly under-represented in India,” he says. “Retail is dominated by small operators, mainly owner-operated kiosks. Currently organised retail accounts for less than 4% of the $400 billion market. “The organised sector is expected to grow to 12% by 2010 as consumer preferences in a growing, urbanising population, half of which is under 25, increasingly shift to modern retail formats. […] One of the oldest global venture funds — and one with a sharp focus on what India can offer — is almost two thirds of the way through its last funding cycle which had $650 million in the kitty two years ago. Norwest Venture Partners (NVP) is already planning to assemble its next war chest which, Managing Partner Pramod Haque indicated, might be deployed in 2009 and could well be around $1 billion. Speaking to the media on Thursday, even as NVP opens its second India office here (the first is based in Mumbai), Mr. Haque said the focus would increasingly be on harnessing and leveraging the reservoir of product and process innovation — much of it Internet driven — that is available in India. An indication of which sector might seem like sunrise for NVP was the recent appointment of former Motorola Vice-President Mohan Kumar as India-based Executive Director. […] Lok Capital LLC, a Mauritius-based venture capital fund, has raised USD 22 million from institutional investors to fund micro-finance institutions in India. “Lok Capital raised its first round of funds from institutional investors including CDC, FMO, KfW, and IFC. The funds will be utilised to finance micro-finance institutions engaged in rural and urban lending,” Lok Advisory Services Managing Director Vishal Mehta said. He said with a fully functional local venture team in place, the Fund was confident of delivering support to larger number of MFIs and contribute to the overall growth of the sector. The increased capital base will enable the venture fund to reach out to a few more MFIs than what it originally envisaged, he said. […] In India, CalPERS made new investments of over $75 million (Rs 300 crore) in 100 new stocks, as per its annual report for the year ended June 2007. Companies belonging to oil/refineries (26.4 per cent), IT (20 per cent), logistics (14.2 per cent), banks/financial institutions (6.5 per cent) and infrastructure (5.5 per cent) accounting for the lion’s share of the fresh capital. Though the annual report does not show any investments in real estate companies, the fund’s spokesperson clarified that they have allocated $100 million to IL&FS Investment Managers for the India Realty Fund and $50 million to Sun Apollo for the India Real Estate Fund. The fund’s latest India portfolio shows that CalPERS’ top five sectors were oil/refineries, banks/financial institutions, IT, cement and telecom. […] Mahindra & Mahindra is setting up a venture capital fund with an initial corpus of $50 million (Rs 2 billion). The fund, which will be held by a trust, is going to invest in the group's film and media initiatives. “The name of the media company is not yet firmed up. But it is the VC fund which will invest into the media business,” says a source in the company. Though the company will kick off with the film production business, it also plans to get into the television, internet and mobile space. “We are also considering the broadcasting business,” the source says. The peak funding requirement for the movie business would be $75 million (Rs 3 billion), the source adds. The plan is to produce 2-4 films in the first year of operations. […] |