Exclusive: The US based asset management company Guggenheim Partners has acquired the control of the India fund of funds business of Thomas Weisel Partners,
VCCircle has learned. Sources said that the transaction is expected to be closed by end of the year. Now Thomas Weisel International and Guggenheim Partners will jointly manage the existing fund - Thomas Weisel Partners India Opportunity Fund, whose corpus is lower than $100 million.
The ownership of the current fund will be determined on the basis of the capital brought in by each entity. TWP will own stake in the fund corresponding to the existing corpus, while Guggenheim’s stake will be determined on the basis of how much they bring in at the expansion stage. It’s likely the fund will be expanded by another $100 million.
However, all the new products to be launched in the future will be fully controlled by Guggenheim, which means Thomas Weisel Partners, with assets worth $1 billion under management globally, is exiting its India operations save the current fund. As part of the deal all the existing employees of Thomas Weisel Partners in Mumbai - led by KV Dhillion (India Head) and Anand Sunderji (Head of Private Equity) - will be moving to Guggenheim. Sources also indicated that Guggenheim is likely to hire more staff in Dubai and Hong Kong where it has siginificant operations and in Mumbai as they launch new products.
Guggenheim is one of the largest funds in the world with assets under management worth $125 billion. It has eight offices in the US including Chicago and New York, and outside the US in London, Dubai, Hong Kong, Geneva and Dublin. Guggenheim has significant operations in Dubai and will use those networks to raise capital to invest in India and also China.
Guggenheim is not entirely new to India. The fund has made three investments in the infrastructure space such as India Hydropower Development Company, Vikram Logistics & Maritime Services Pvt Ltd and IRMC (see the table).
Thomas Weisel’s India Opportunities Fund has been on the road to raise a targeted sum of $200 million for its fund of funds business, however, it had not been able to achieve the final closing. Thomas Weisel’s move could not have come at an appropriate time with fund raising getting tougher in the wake of a global slowdown and a looming credit crisis.
A 40 per cent of the existing Thomas Weisel India Opportunities Fund has been invested, sources said. They include it $15 million in IDFC Private Equity and $10 million in iLabs Group.
Thomas Weisel also had a 25-member research team in India which was wound up after its head Praveen Chakravarty moved to BNP Paribas Securities India as COO and head of research late last year.
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