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January 12, 2011

Limited Partner Interview: Paresh Thakker of Religare

Paresh Thakker, Head-Group M&A and MD-Global Asset Management, Religare

In 2010, the Delhi-headquartered Religare Enterprises Group acquired significant stakes in two US-based fund-of-fund houses to jumpstart its goal of building a Multi-Boutique Global Asset Management Platform. In February, Religare announced acquisition of controlling stake in Northgate Capital, a PE fund of funds which manages approximately $3 billion on behalf of more than 400 prominent institutional and high net worth families and individuals. In December, Religare announced signing of deal entailing acquisition of majority stake in Landmark Partners, a PE and Real Estate fund-of-funds focused on secondary transactions. Landmark manages ~$8.3 billion of assets.

Overall, Religare is aiming to acquire/partner with 8-10 affiliates/asset management companies over the next 3 years targeting an assets under management of $100 billion.

Venture Intelligence recently spoke to Paresh Thakker, who is responsible for leading Religare’s acquisitions and driving corporate strategy for its Global Asset Management business, including identifying and executing new investments, and working with affiliates on their growth plans.

Venture Intelligence: How will the two recent fund-of-funds acquisitions impact Religare’s investments in Indian PE/VC Funds?

Paresh Thakker:
Religare’s activities in Indian PE/VC funds would be through Northgate Capital and Landmark Partners. These firms will continue to pursue their fund of funds investments globally. India is an attractive PE/VC market and hence would form part of their strategy.

VI: How do you see the current fund raising environment in India?

Last 3 years have been challenging for PE/VC fund raising globally including India. As per market sources, PE funds raised for India is estimated at $9 billion in 2007, $4.5 billion in 2008, $4 billion in 2009 and $2.5 billion in 2010. It is estimated that funds focusing on India have dry powder in excess of $11 billion. Domestic institutional and retail investors are now more comfortable with PE and it’s a considerable market being already tapped by many funds.

What types of funds is Religare looking to investment in India?

PT: We would like to have at least a couple of our affiliates/partners in our Global Asset Management platform to be Indian firms. To that effect, we are currently evaluating a few deals.

VI: The sweet spot in India seems to be largely in the growth capital segment. Is this going to continue? What trends are you seeing in terms of new funds being raised?

Stage of life cycle of economy drives the nature of capital requirement. There are lot of mid and small size businesses in India requiring growth capital. Structurally, till we are in high growth phase, there would be robust demand for growth capital. However, the industry will need to find ways for firms to differentiate themselves by way of strategy, track record etc.

VI: Do you see buyouts continuing to remain a small segment of the market?

Yes, because of lack of opportunities in the buyout space. India's family-run and entrepreneur-driven firms have long been reluctant to sell out.

VI: Would you invest in Distressed Debt and Real Estate?

PT: Yes, we are evaluating opportunities in the same

VI: What is the biggest issue facing Indian private equity at the moment?

PT: Limited track record for most firms and availability of talent are a concern.

This interview first appeared in the Venture Intelligence Indian 2010 Annual Private Equity Roundup Report