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Top Five Most Active Private Equity Firms In 2010

BY  Pallavi S
Energy emerged as the most favoured investment bet for PE firms in India.

Year 2010 saw revival in private equity investments in India after two years of slowdown as the story of growth in the country was a rare combination of believable and sustainable at the same time. It also witnessed top bracket global PE firms take the front bench as the biggest dealmakers by value even pushing down the most prolific investors such as International Finance Corporation, the private lending arm of the World Bank, and Sequoia down the ranks. So much so that none of the top five PE investors of 2009 managed to maintain their position this year. According to VCCedge data, energy appeared to be the most favoured investment bet for the top PE firms during the year. Read to know who made it to the top five (Note: The ranking is based on the announced deal value. If the deal value is not known, that will not reflect. We have only considered private equity transactions for this ranking):

Macquarie-SBI Infrastructure Fund

Number of Deals: 3

Deal value: $531 million

The joint venture between Macquarie Capital, State Bank of India and the International Finance Corporation, that targets investments in infrastructure and allied assets, struck three deals in telecom tower business, airport infrastructure and power. The firm’s over half a billion dollar investments included a $300-million transaction to buy around 11% stake in Viom Networks, that brought together the passive telecom infrastructure businesses of Quippo Telecom Infrastructure Ltd and Tata Teleservices under one roof last year. The fund that had its initial close in April 2009 had said it was raising further capital with the target of having commitment of $1.5 billion at the end of the capital raising period. One of the few large infrastructure-only funds that are seeking investment opportunities in the country, Macquarie SBI Infrastructure Fund comes with a strong parentage and high quality investors backing the fund managers. Given the large investment appetite in the country for improving the infrastructure to support high growth in the coming years, we have certainly not heard the last of Macquarie SBI Infra Fund that may continue to be among the chartbusters in the coming year too.

Temasek Holdings Advisors India Pvt. Ltd.

Number of Deals: 5

Deal value: $ 462.3 million

One of the two sovereign wealth funds of Singapore, Temasek was back among the top investors’ charts after going slow for the last two years. The firm (among the most active sovereign funds in India) spread its investments across financial infrastructure, healthcare, power and construction. Its two biggest deals included the $200-million transaction in GMR Energy besides a deal to buy 5% stake held by New York Stock Exchange in National Stock Exchange. It also invested in Max India, Sobha Developers and a project of Lodha Group.

The sovereign fund--that last year changed its global charter what analysts viewed as Temasek downplaying its links to government policy or strategic interests as it eyes more overseas investments—has assets under management of over $140 billion (as per its website). The bounceback in global stock markets allowed Temasek’s portfolio value rocket 43% to its highest level ever for the year ended March’10 but also saw profits shaved by a fourth. The fund that counts marquee names of Indian business among its portfolio has Asia at the centre of its investment focus and with India playing a key role. Temasek is likely to continue as a leading investor in the near term.

Blackstone Advisors India Pvt. Ltd

Number of deals: 4

Deal value: $431 million

The top bracket buyout firm that made some untimely management buyouts and other investments in the so-called ‘wrong’ sectors at the peak of the stock market boom has not let some setbacks bother it much. It struck one of the single biggest investment ever by a private equity firm in the sunrise sector of power by picking a stake in Moser Baer Projects Pvt Ltd for $300 million. Add to it its investment in Monnet Power Co and you get the drift, Blackstone is genuinely bullish on power sector in India. Blackstone also invested in agri related firm REI Agro and struck a deal in the mass media space by investing in Jagran Media Network Pvt Ltd, the holding firm for Jagran Prakashan. Although this $50-million deal was just about a fifth of its failed deal to buy a stake in Ushodaya Enterprises which owns Eenadu group in Andhra Pradesh three years ago, 2010 was the biggest year for Blackstone that has invested over $1.25 billion in the past five years.

Olympus Capital Holdings Asia

Number of deals: 2

Deal value: $308 million

The independent middle market private equity firm that has invested over $1.3 billion in over 30 portfolio companies throughout Asia, including China, India, Japan and South Korea, has made one of its biggest investment commitments in India this year. Its $300-million partnership with Tata Power comes at a time when almost everyone is betting on energy. The firm, that also counts among its portfolio firms Quattro BPO, crane moving services firm Sanghvi Movers and Orient Green Power, set up its India office two years ago and looks set to surprise the markets with few standalone large deals in the future too.

Kohlberg Kravis Roberts & Co.

Number of deals: 3

Deal value: $289 million

The firm most synonymous with the clan of global buyout giants had been sewing few big transactions every two years. It didn’t disappoint in 2010 when private equity firms entered a more mature investment territory in India. KKR, that has in the past completed buyout of Flextronics Software Systems and later invested a large sum in Bharti Infratel along with other investors such as Temasek, cut multiple deals in India this year spread across power, hospitality-cum-retail and cement businesses.

Its biggest transaction was co-investing around $200 million in Coffee Day Resorts (holding company of Café Coffee Day besides operating firm of hotels and resorts) along with New Silk Route and Standard Chartered Private Equity. It also put in money as pre-IPO deal in Avantha Power & Infrastructure, the power arm of Gautam Thapar-led Avantha Group and took a contrarian call by investing in the cement business of Dalmias. Having roped in former chief of Citibank in India Sanjay Nayar, KKR is likely to be a more permanent figure among the top PE firms in India.

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