This seems to be season for private equity professionals to don the entrepreneurial cap. The latest to join this group could be Raul R Rai, managing director, General Atlantic LLC (GA), who may leave the organisation. According to sources, Rai, who is believed to be putting in his papers, is planning to set up his own private equity fund.
Rai is based in GA’s Mumbai office. Apart from Rai, the Mumbai office has three more managing directors–Abhay Havaldar, Ranjit Pandit and Sunish Sharma. GA, which has investments in Asian Genco Pte Ltd, Patni Computer Systems Ltd, Jubilant Organosys, NSE India Ltd, Hexaware Technologies, Sharekhan Ltd and Genpact Ltd, opened its office in Mumbai in 2002. Established in 1980, GA manages approximately $15 billion in capital and has more than 75 investment professionals across the globe.
Mr Rai did not respond to repeated calls and text messages sent to him. “Raul Rai remains a managing director in our India office and it is our policy not to comment on matters related to our personnel,” said a spokesperson from General Atlantic, in response to a VCCircle query.
According to sources familiar with the development, Rai is hitting the market to raise a mid-bracket fund, which could be a private equity or hedge fund, leveraging on his contacts in global financial institutions as well as the corporate world. “Rai is working on his international stints and experience to pull together a structure, and he should be relatively better placed than some of his industry peers who too are in the market for a maiden fund raise,” said the source.
Commenting on the international institutional space, a source said, Eurozone’s worries over the worsening economy of PIGS – Portugul, Ireland, Greece and Spain – will hold back some of the region’s LP allocations. “There are still a lot of airpockerts in global economy. The first-time fund raise continues to be a challenge, especially when it involves GPs who have no prior experience in building a structure,” this source added.
It was in 2005 that Rai joined GA’s Mumbai office as principal and was promoted as managing director in 2007. Prior to joining GA, Rai was managing director and global co-head of Software Technology Investment Banking at UBS Investment Bank. From 1996 to 2000, he was with Goldman Sachs in New York and London, ultimately as Vice President in the Communications, Media & Technology group. From 2000 to 2002, he was corporate strategy and planning director of Vizzavi Ltd., a London-based joint venture between Vodafone and Vivendi. Rai received his MBA from Harvard Business School in 1996, where he graduated as a Baker Scholar, and he graduated in Computer Science and Economics from Boston University in 1991.
With the economy making a quick recovery, lot of PE honchos, who nurtured plans of setting up their own funds, are looking at going ahead with their ventures. Only last week, Jayanta Banerjee, Anand Vyas and Sunay Mathure of ICICI Venture put in their papers with plans of starting a new PE fund. While Banerjee was the president, Vyas and Mathure were the directors of the firm.
Consider the growing list of new ventures to be started by some of these PE honchos and industry professionals: In April, Anand Sunderji quit as the director of fund of funds of Guggenheim Partners, and was believed to be pursuing his own entrepreneurial venture in the Indian private equity space. In March, Rajesh Khanna, managing director, Warburg Pincus India, put in papers to start his own fund. Neeraj Bhargava, group chief executive officer of business process outsourcing services firm WNS Holdings Ltd, quit his job to partner Harsha Raghavan, who has launched a private equity firm called Steer Capital in January. Baring PE honcho Subbu Subramaniam left the firm to form his own fund MCap Advisors. Ajay Relan left CVCI (Citgroup Venture Capital International) to form CX partners. Rajesh Khanna of Warburg Pincus left the private equity major to set up his own fund. The Burman family is backing former Dabur Pharma CEO Ajay K Vij to set up a private equity fund focused on healthcare and lifesciences space that is targeting to raise $200 million.
Apart from these entrepreneurial venture-driven exits, there have been several senior-level movements in the PE industry. Sample this: Raj P Kondur, the co-founder of India’s largest private equity fund ChrysCapital, joined Ascent Capital Advisors India Pvt Ltd (previously UTI Venture) as director recently. In March, Rajiv Shukla, director of investments at ICICI Venture, joined Morgan Stanley to manage its emerging market healthcare equities at FrontPoint Partners, the $7-billion hedge fund owned by Morgan Stanley. PR Srinivasan, who was heading Citi Venture Capital International’s (CVCI) India biz, is leaving the firm for personal reasons. Mahesh Chhabria, a partner looking after growth capital investments for British PE major 3i Group Plc in India, has joined Actis, one of the oldest PE firms operating in India in February. In January, Amitabh Chakraborty, formerly president – equity at Religare Securities Ltd, has joined private equity firm Kitara Capital Pvt Ltd as managing director and chief investment officer. Narayan Ramachandran, CEO, Morgan Stanley India, left the firm in January. According to Business Week, Ramachandran plans to work with non-governmental organisations and influence public policy in India to ensure that financial services are made available to more people. Ramu Kennedy, principal at ICICI Venture Funds Management Company Limited, quit the firm to join G Sreenivasa Rao-led e2E group as co-founder and group CFO.