UK’s development finance institution CDC Group Plc said that Srinivasan Nagarajan will join the firm as regional director for its investments in India. Nagarajan, who is currently director at Actis, will be based out of Bangalore. He is expected to join by middle of 2013 after completing his exit arrangements with Actis. Nagarajan sits on the board of Nilgiri's Diary Farm Ltd and has worked on investments like IDFC and the National Stock Exchange.
CDC also said private equity veteran Donald Peck will advise firm as chairman of its South Asia investment committee. Peck is one of the founding partners at Actis and headed its South Asia investments till 2008. He is one of the co-founders social venture capital firm Lok Capital, where CDC is also a limited partner.
Both Nagarajan and Peck are returning to CDC as Actis was formed in 2004 as a spinout from the former. The appointments come after Anubha Shrivastava, the managing director responsible for Asia investments at CDC since 2007, quit in August this year.
"He will (Nagarajan) be CDC's Regional Director in India and will be the main contact on the ground for our investment business in India and South Asia involved in supporting our direct, debt and funds investment teams as they make investments in the country," a spokesperson said in an e-mailed response to VCCircle's queries.
The CDC Group focused on fund-of-fund investments across Asia and Africa, but recently changed its strategy to focus only on South Asia and sub-Saharan Africa. The firm is now looking to make debt and direct investments in these geographies as opposed to only a limited partner role in private equity/venture capital funds.
India is the single largest market in terms of exposure for the CDC Group, accounting for 21 per cent of its total assets of $4 billion (£2.6 billion), according to its latest annual report. In South Asia, the firm has now been investing in funds aimed at poor states and businesses operating at bottom of the pyramid. In 2011, it made fresh commitments of $80 million to three funds -- Pragati India Fund, which focuses on the eight poorest states in India and social venture funds Lok Capital and Aavishkaar.
Direct investment strategy
Regarding its direct investments, CDC will not compete with its own general partners (GPs, or funds where it is an investor), but focus on co-investments with them and development finance institutes (DFIs).
These investments are expected to be in the $10 million to $50 million range, but the firm is willing to write $100 million cheques on larger infrastructure investments.
"As we're in the early stages of our direct investments strategy we're looking pretty much at co-investments only over the next couple of years and these will be alongside GPs and possibly with other development finance institutions too. We're clear that we're not in competition with our GPs on deals," said the spokesperson.
The CDC Group has backed funds including Multiple Alternate Asset Management, Actis, Avigo Capital Partners, Baring India, IDFC Private Equity, India Value Fund Advisor, Seedfund and Aureos.
Earlier this year, CDC appointed former Actis executive Mark Pay as managing director to lead the direct investment efforts and added three more executives in August including IDFC Private Equity’s Rohit Anand.
The firm made its first direct investment this week by providing $32.5 million finance facility to the founders of Export Trading Group (ETG), an African agribusiness backed by Carlyle and Standard Chartered Private Equity.
(Edited by Prem Udayabhanu)