The wealthiest charitable foundation in the world, Bill & Melinda Gates Foundation, can’t sometimes resist the temptations of for-profit-only investments in India. In a unique deal, the Foundation has bought 98,790 shares of the Tata Group-owned retail chain Trent Ltd for a sum of Rs 4.47 crore. The seller is a Morgan Stanley FII unit. The shares were bought at Rs 452 per share. The shares are close to their 52-week low of Rs 420, while the high was Rs 829.
Internationally, Gates Foundation has been making investments in stocks.
Trent is the retail division of Tata Group which runs the Westside chain of stores. This is the second such investment of the foundation in India. It had previously invested Rs 2.5 crore in Geometric Software.
Since the investments are very small, this cannot be classified as a private equity investment. This is more of efficient use of capital of the foundation through treasury operations. Since the markets are lying low, there cannot be a better time to be active in treasury operations.
Bill Gates Investments manages the foundation which has a $38 billion corpus. It has to invest at least 5 per cent of the money in charitable activities every year.
Gates had recently left Microsoft where he was designated as the chief software architect of the company. Gates had left the operational role in MS a few years ago in favour of the current CEO Steve Ballmer. Billionaire investor Warren Buffet has made a $30.7 billion pledge to the foundation. He is also on the board of trustees.
Trent Ltd. is engaged in the business of retailing with its two formats Westside and Star India Bazaar. While Westside is a chain of retail stores, Star India Bazaar is a one stop shop hypermarket. Some financial investors who have taken stake in Trent are Reliance Capital, HDFC, Franklin, Templeton and Swiss Finance. Trent has posted revenues of Rs 716 crore and a net profit of Rs 34 crore on a consolidated basis in 2007-08.