Global investment firm Milltrust International Group has put money in several Indian companies. It has assets under management of $450 million and has investors including Middle Eastern sovereign funds, pension funds and insurance companies backing the firm. Chief executive Simon Hopkins, who will be a speaker at VCCircle’s flagship VCCircle India Limited Partners Summit 2016, shares his views about Milltrust’s plans for India. Edited excerpts:
Could you tell us about the exposure Milltrust has in India?
We have a platform business which is largely focused on the developing world. India is one of the two largest economies in the developing world and we believe India will be a great economy in the next decade to invest in. India is central to our investment thesis as a business.
We have teamed up with one of India’s largest investment groups called UTI International. We have a joint venture with them which delivers internationally distributable regulated Indian equities to international investors. The principal philosophy behind this business is that historically institutional investors have been very shy in committing capital to India. From an institutional standpoint, the world’s pension funds and insurance companies have a very modest allocation to India. This under-represents the role India plays as a percentage of the global GDP. We believe this will change because India has brought in a lot of reform, both at macro and micro levels, obviously driven by the (Narendra) Modi government.
What is your view on infrastructure as a sector for investment in India?
I’m a significant investor in real assets. We have investments in infrastructure, agriculture and in businesses backed by strong assets. These assets are capable of delivering reliable returns… we would also like to own real assets to protect against inflation. Real assets are also central to food production, which is an important consideration in India. The infrastructure story is at the heart of the India story. India has had under-investment in infrastructure for decades and needs to put in significant investments in the sector.
How much are you likely to invest in India over the next 18 months?
Typically, investments under $100 million is our sweet spot. Currently, we are working on two deals, one is a hotel investment and the other is recapitalising a food company. The hotel investment will be in the range of $70 million and recapitalisation of food business will be $50 million. In the joint venture with UTI, we have so far invested $40 million. Last year, we invested between $160 million and $200 million including our investments in public equities. We have been talking to a number of Indian fund managers about using our platform as a means to reach international investors.
What investment opportunities do you see in India?
There are opportunities to invest in quasi-distressed assets in India. We are working on a number of deals where Indian businesses that find it hard to access international capital or who have been paying unrealistic interest rates but want to access international investors and expand their presence.
What is your outlook towards India with respect to other BRIC nations?
In 2016, India could be potentially the fastest-growing among BRIC countries but we will have to see since the world is a very precarious place today. A careful steering of the economy will help India grow.