Oak Investment Partners, a pedigree multi-stage American venture capital firm, is establishing an India office to look at deals in the country. This is the first office for Oak Investments, which has been investing since 1978 and with $9 billion in assets under management, outside US.
It has also hired Roy Rodrigues, former head of investment banking at Anand Rathi Securities as venture partner based out of Mumbai.
The firm, which invested in Tikona Digital Networks Pvt. Ltd, will look at deals between $5 million and $50 million growth capital deals in the country. The investment in Tikona was clinched before Oak opened its India office.
Oak will focus on investments in sectors like technology, healthcare, financial services, clean energy and telecom in India, Rodrigues told VCCircle. Oak, which has a tech skew, has backed companies like blog network The Huffington Post and Greenvolts, an award-winning solar technology firm.
Rodrigues has 15 years of experience in technology investment banking and was with Bear Stearns as an MD for more than a decade. He said that Oak hopes to close a few more transactions in coming months.
Its investment in Tikona, which recently won broadband wireless access (BWA) licence for five telecom circles, came from its global fund. Other investors in Tikona include Goldman Sachs Investment Partners, Indivision India Partners, and L&T Infrastructure Finance.
Oak has also invested in BPO services firm Sutherland Global, which has operations in India and acquired Adventity earlier this year.
"We are growth investors and are very comfortable with minority positions. The no. 1 criteria is that companies should be ready for a big display of growth. Companies which are flatlined and use leverage model to cut costs and increase margins are not for us," said Rodrigues. Oak will invest in India from its 13th fund, which raised $770 million.
Oak Investment Partners (different from Oak Hill Capital Partners which has backed cos like Genpact and EXL Services) has raised a total of $9 billion in committed capital. In May 2006, Oak raised its 12th fund at $2.56 billion, which was reportedly the largest venture capital fund ever raised.
While a slew of private equity and venture capital firms established India offices in the heydays of 2006 and 2007, the pace of new entrants has slowed in the past couple of years as they face competition for deals from established players and indigenous upstarts. A few PE firms also shut India shop before closing any deals in the aftermath of global credit crisis last year.
Several firms are establishing India presence over the years and building teams. Some new entrants which have invested in India over last two years include TA Associates, Advent International, Quadrangle, Foundation Capital and Globespan Capital among others.