Rajeev Gupta, Managing Director of Carlyle in India and a member of Asia buyouts team, has quit the private equity firm after a five-year stint at the buyout firm.
Dorothy Lee, Head of Asia Communications, Carlyle Group, confirmed the development to VCCircle, in an email: “Rajeev has decided to leave the firm to pursue other interests. He has been instrumental in helping us build a strong investment team for India. We wish him well in his future endeavours. We are very committed to India. Our team in India is strong and is ready to capitalize on the opportunities we see in the country.” Gupta had denied he was quitting when VCCircle contacted him three weeks back to confirm the development.
VCCircle could not ascertain where he is headed and a mail sent to him did not elicit a response on Monday. According to sources, Gupta may be heading for a quasi–entrepreneurial venture with Hemendra Kothari, Chairman, DSP Merrill Lynch. Interestingly, prior to joining Carlyle in 2005, Gupta was the joint managing director and head of investment banking of DSP Merrill Lynch, the Indian joint venture of the US investment bank. VCCircle could not independently confirm this information.
Carlyle’s buyout fund has not been able to do any deals in India except its $650-million deal in housing finance firm HDFC in 2007. Gupta was part of this deal. Carlyle has a separate team for growth capital transactions, which is headed by Shankara Narayanan. The growth team recently concluded an investment in Andhra Pradesh based dairy firm, Tirumala Milk Products.
Carlyle’s buyout rivals Blackstone India Advisors Pvt. Ltd and KKR have been active either doing buyout or large minority transactions. In 2007, Blackstone bought out a majority stake in Gokaldas Exports and also did a management buyout of Intelenet Global Services from HDFC. KKR bought out a majority stake in Aricent Ltd in 2006. While large majority deals are tough to do in India, these firms have been doing minority deals as well – Blackstone has invested $300 million in Moser Baer Projects Pvt Ltd, and also in Jagran Media Network Pvt Ltd, the holding firm for Jagran Prakashan and in agri related firm REI agro. KKR recently picked up minority stake in Amalgamated Bean Coffee Trading Company Ltd (ABCTCL).
The trend in last two years has been that many veteran PE executives have quit their jobs to go solo by setting up their own independent investment management outfits. Rajesh Khanna, former Warburg Pincus managing director and India head, quit to start a new private equity fund Arka Capital. Other PE biggies who quit earlier last year to set up their own ventures include Ranjeet Nabha, former managing director and CEO of Indian operations of WL Ross & Co, who plans to start his special situations opportunities fund of around $250 million.
P R Srinivasan, the former managing director & India Region Head of Citigroup Venture Capital International (CVCI), started Exponentia Capital looking to raise a $400-500 million maiden fund after quitting earlier this year.
Industry stalwarts like Ajay Relan (ex-CVCI head who started CX Partners) and Renuka Ramnath (ex-ICICI Venture head who started Multiples), who took the plunge in 2009, almost setting the new trend of independent managers, have already had successful fundraises.