IDFC Alternatives inks pact to sell infrastructure funds to GIP
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Multi-asset manager IDFC Alternatives Ltd has agreed to sell its infrastructure asset management business to US-based private equity firm Global Infrastructure Partners (GIP).

The sale will conclude on the receipt of the requisite regulatory approvals, parent IDFC Ltd said in a stock-exchange filing on Saturday. It didn't give financial details of the deal.

IDFC Alternatives will keep managing its private equity and real estate funds, the filing said.

The announcement comes a month-and-a-half after VCCircle reported that GIP had struck a rare secondaries deal—where a PE firm sells its portfolio to another PE firm—in India to buy the infrastructure portfolio of IDFC Alternatives.

The infrastructure portfolio of IDFC Alternatives consists of two funds--the India Infrastructure Fund I and Fund II. The two funds have collectively invested about Rs 9,337 crore ($1.4 billion) in 32 infrastructure companies across roads, power, telecom tower and renewable energy sectors. The first fund invested in 17 companies and the second fund in 15, according to an IDFC investor presentation.

The first fund has made 11 exits. The second fund was fully deployed only recently.

IDFC Alternatives, a wholly owned step-down subsidiary of IDFC through IDFC Financial Holding Co Ltd, had emerged as one of the most active infrastructure investors in the country in recent years, buying multiple highway projects and renewable energy firms through the infrastructure funds.

Among others, these funds invested in the road projects of Ashoka Buildcon Ltd and Gayatri Projects. They also have a stake in a company founded by the former promoters of courier company Blue Dart, which manages a cargo terminal at the Delhi airport.

The first fund had raised $927 million in 2009, while the second fund mobilised $900 million in 2014.

Although there have been secondaries transactions in Indian alternative investment segment in the past, they have been rare. In some cases, the buyer acquired the limited partners’ interest in a specific fund. Such deals include TR Capital acquiring a large portion of Tano Capital’s first fund.

In other cases, a bunch of assets or the entire portfolio moved to another investment manager. Such deals included Canaan selling its venture portfolio to JPMorgan and CVCI transferring its portfolio to the Rohatyn Group.

GIP manages over $40 billion for its investors while the companies in its portfolio have combined annual revenue of over $5 billion.

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