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ADAG Forms Entity To Raise $1 Billion Private Equity Fund; Ramesh Venk

10 August, 2008

Reliance Capital, the financial services arm of Anil Dhirubhai Ambani Group (ADAG), has launched its private equity advisory arm Reliance Equity Advisors Ltd (REAL), which will advise its soon to be set up $1-billion private equity fund, The Economic Times has reported. The firm has received regulatory approval for an initial corpus of $1 billion, of which ADAG has contributed around $200 million and the rest will be raised from two linked funds, based out of India and Mauritius respectively, adds the report.

REAL has put in place a 15 people advisory team members of which have been hired from Actis LLP, ICICI Ventures and Sequioa Capital, said a Bloomberg . The team is being led by ADAG CFO Ramesh Venkat, who will be the Director of REAL, besides his duties as CFO of the group. REAL will invest in emerging sectors such as services, logistics, realty, pharma, media firms and Indian companies investing overseas with investment size ranging from $75 million to $100 million. The board of REAL will comprise of Venkat, Amitabh Jhunjhunwala, vice chairman of Reliance Capital, and chartered accountant Rajendra Chitale.

REAL will be a wholly-owned subsidiary of Reliance Capital and will be an advisory private equity player which will offer a range of services. The report added that the firm has already started talking to investors and expects to close the fund in the next few months. An earlier report had said that the fund has already raised over $500 million. Venkat said that REAL would be in the lines of ICICI Ventures and would utilise the industry experience of Reliance.

ADAG has been making private investments in Indian companies out of Reliance Capital’s proprietary book. Some of these companies include Deccan Aviation, Sukam Power, Prime Focus, Kinetic Engineering, DTDC Courier, Yatra Online, Financial Technologies and Southern Wind farms. Reliance Capital’s has made a maximum private equity investments of upto Rs 2,000 crore.

The ADAG also has a private investment advisory business called Reliance Technology Ventures Pvt Ltd, headed by ex-IBM executive Harshal Shah. It has invested in Sequans Communications, a France and US based company that provides WiMax chips. Last year, along with Sequoia Capital, RTVL invested in US-based Stoke Inc. It also invested $10 million in E-Band Communications Corporation.

The group is also launching a global investment bank and institutional broking firm. It recently hired Keshav Singh, former head of Deutsche Equities, to set up the firm called Reliance Equity International. This firm will later diversify into investment banking also and take on global investment banks.

There are other Indian conglomerates who are planning or have already made a private equity foray. Aditya Birla Group’s private equity arm has been active since earlier this year picking up stake in Delhi-based retail chain V Mart Retail recently, besides a stake in Core Projects & Technologies. Tata Group, has also firmed up its private equity foray through its financial services arm Tata Capital Ltd (TCL). It plans to launch different private equity funds (of $200-300 million each) focusing on different sectors such as technology, communications, healthcare and midcap space. Malvinder Singh’s Religare Enterprises has also incorporated its private equity arm Religare Venture Capital.


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ADAG Forms Entity To Raise $1 Billion Private Equity Fund; Ramesh Venk

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