India Infoline buys majority stake in mid-market focused PE firm India Alternatives

India Infoline’s (IIFL) wealth management unit, IIFL Wealth Management Ltd, has bought a majority stake in Indian mid-market focused private equity advisory firm India Alternatives Investment Advisors Pvt Ltd, which will expand IIFL’s presence in the alternative asset management business. IIFL has also committed a significant contribution to India Alternatives' fund, a statement said.

India Alternatives currently manages India Alternatives Private Equity Fund or India Alt Fund, which had an initial commitment of Rs 230 crore. It chases mid-stage growth capital deals.

It was founded by Shivani Bhasin Sachdeva, who will continue to lead the unit under IIFL as MD and CEO. The PE firm was sponsored by Centrum Capital’s promoter Chandir Gidwani who had invested his proprietary capital.

Sachdeva said in a statement, “Association with IIFL Group is synergistic and will strengthen the India Alt platform; especially in fund raising, deal sourcing and exit management capabilities.”

She added that India Alt Fund is eyeing fresh deals in consumer and consumables, healthcare and pharmaceuticals sectors.

Karan Bhagat, MD and CEO of IIFL Wealth, added that, “IIFL’s fundraising capabilities and relationships with marquee families will help India Alt accelerate its growth path.”

India Alt Fund has made two investments starting with its debut transaction in 2010-11 in Mumbai-based company Ideacount Education Pvt. Ltd, which provides media and entertainment training and related services.

Two years ago India Alt Fund had co-invested with India Evolving Fund, a fund managed by Faering Capital, in Bangalore-based Gokaldas Intimatewear Pvt. Ltd, which manufactures underwear garments and offers products under the brand name Enamor.

IIFL's acquisition of India Alternatives marks a rare consolidation in the Indian private equity industry, which has been facing challenging times with exits for previous investments being far and few between and India no longer a must-have for international LPs.

Some PE firms shut down as they failed to get initial fund commitment while a few others have been on the road for more than two years to raise a new fund and, in effect, just managing their past investments.

In another deal last year, Quadria Capital had acquired Milestone Religare, which managed an education and healthcare-focused PE fund. A few years ago IL&FS Investment Managers had snapped Saffron, which brought under its control a Europe-listed real estate platform Yatra Capital.

The acquisition of India Alternatives would expand the scope of the alternatives asset management business of Carlyle-backed diversified financial services firm IIFL. IIFL Wealth Management, a wholly owned private wealth management unit of IIFL, was incorporated six years ago and has total assets of around Rs 55,000 crore or around $9 billion under management.

Nirmal Jain, chairman of IIFL Group, said, “This acquisition will enable IIFL Group to widen its presence in the PE industry and provide an added offering under the asset management platform.”

IIFL currently has PE investments focused on the real estate space. Early this year it raised Rs 735 crore ($118 million) for a new realty fund with an option to co-invest a further Rs 500 crore, under the IIFL Income Opportunities Fund-Series Special Situations, an alternative investment fund dedicated to the real estate sector. In what would be one of the first instances of a domestic private realty fund being managed by a third-party investment firm, it mandated realty investment firm Indiareit Fund Advisors to manage this real estate fund.

However, in the past IIFL Group has participated in PE deals with investments in CL Educate and Arch Pharmalabs.

(Edited by Joby Puthuparampil Johnson)

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