Unlike its competitors such as Blackstone, KKR has been a late entrant to India. It was only two months back that the private equity giant Kohlberg Kravis Roberts & Co (KKR) opened its office here. One of its co-founders, Henry Kravis on his visit to India, which was part of an Asia tour told reporters that India is a special place for them and that they believe in the future of country.
However, the legendary buyout investor known for making leverage buyout deals was quick to admit that the market in India is different with “leverage not being important here”. The private equity firm will look at making growth capital investments in the country. He added, “we’re going to insist on board positions and improving operations even if we don’t own 100%”.
Adopting a cautious approach, the investor told ET that they have turned down a few deals in India and not rushing into investments. He also said that the fund looks at Asia as an attractive geography and would look at about 3-4 industries in Asia.
KKR recently appointed former Citi India CEO, Sanjay Nair as its CEO and country head for India.
The fund’s latest investment in India was made in February 2008, when it invested $250 million in Bharti Infratel Ltd. It made its first investment in the country in 2006 when it acquired the software unit of Flextronics International Ltd. for $900 million.
Despite the slowdown in the economies worldwide, Kravis sees “rays of sunshine” in India, China and US. According to a report in wall street journal, Kravis sees the biggest private equity deals being valued between $1 billion and $5 billion. He expects higher taxes and more regulations for the private equity industry.
It is becoming tougher for KKR to buy or sell companies now owing to the regulations that require PE companies to mark the value of their companies to the price of the comparable listed companies. As of December 31, 2008, the fund has marked 80% of its portfolio down 41%. However, the good news for the fund is that 69% of its portfolio showed either increased or same earnings in 2008 versus 2007.
Over the past 30 years, KKR has bought 165 companies from 28 different industries. The total value of these deals is pegged at $445 billion.