Hedge Funds Muscle In On Private Equity Deals
Tuesday, June 5, 2007 : Permalink Livemint- Gridstone Research, an equity research start-up in Mumbai, had secured venture capital funding from three investors last March. The investors included Charles River Ventures, Helion Venture Partners and finally Maverick Capital, a $10 billion (Rs41,000 crore) American hedge fund.
What appeared then to be a one-off has now become a bit of a trend. Hedge funds are fast penetrating India’s private equity market and, since mid-2005, have concluded 36 deals worth $1.7 billion. And, this is just a partial estimate, based on deals that are publicly known.
The actual numbers, industry experts say, is likely to be much higher.
In the past 18-24 months, several leading US hedge funds have made a beeline for India. DE Shaw & Co., one of the world’s top 10 hedge funds with $30 billion in capital under management, set up shop in Delhi last year to invest in private equity and distressed assets.
Och-Ziff Capital Management, which has more than $11 billion in assets under management, struck its first private equity deal this year with a $51 million investment in Bangalore-based Nitesh Estates for a 25% stake.
Old Lane, the New York-based hedge fund led by former Morgan Stanley executive Vikram Pandit and recently acquired by Citi, is investing out of a $500 millon India PE fund that will be fully invested in 18 months. Other heavy-hitters in the Indian private equity market now include New Vernon, Farallon Capital Management, Galleon Partners, Artis Capital and GLG Partners.
