Finally, the Burmans’ entry into private equity is official. Promethean India, the PE firm listed on Alternative Investment Market (AIM), is being spun of as an independent unit, separate from Promethean UK. The new fund is being renamed as Elephant Capital Plc, while the investment manager to the fund will be renamed as Elephant Capital LLP. The new unit will be run by Dabur group scions Gaurav Burman (pictured), the existing partner in Promethean, and his elder brother Mohit Burman. This restructuring will take place by the end of this month including the name changes.
However, the investment policy and strategy of Promethean India and the boards of both Promethean India and Promethean Plc will remain unchanged.
As of now Peter Burt doubles up as the chairman of Promethean India and Promethean Plc group. Gaurav Burman, the founding partner and senior member of the investment team at Promethean Investments, has been at the helm of Promethean India since its launch in April 2007.
A former investment director at Dresdner Kleinwort Capital, 36 year old Gaurav had recently joined the board of Promethean India. He also holds directorships in Dabur Oncology Plc, Promethean Investments (Carry) Limited, Promethean Investment (General Partner) Limited, Intermediactive Group Limited and Promethean Investments Fund II (General Partner) Limited.
Gaurav Burman, who is the lead manager at Promethean Investments LLP responsible for Promethean India will however cease to be a member of Promethean Investments LLP from the effective date which has been fixed as August 29, 2008. Elephant Capital LLP will apply for a FII licence from the domestic market regulator SEBI and pending which it will operate under the FII licence of Promethean Investments LLP.
As of the effective date, Elephant Capital will continue to make investments through the existing investment structure (an English limited partnership which in turn invests in India through two Mauritian incorporated subsidiaries). The general partner and the carried interest partner of the English limited partnership will be newly incorporated subsidiaries of Elephant Capital.
Promethean 2 Limited, the Isle of Man incorporated subsidiary of the British firm Promethean Plc that manages the Mauritius companies through which the English limited partnership invests, will be transferred to Elephant Capital.
What the restructuring does is to make Promethean Plc group having no future liability against any losses that may be incurred by it in respect of Elephant Capital. Secondly, Promethean Investments LLP and Promethean Plc will cease to have any future entitlement to any carried interest in respect of Elephant Capital’s investments from the effective date. Promethean Investments LLP has waived its entitlement to the management fee in respect of Promethean India from the period starting 1 March.
Promethean India was launched in April 2007 as an AIM listed fund. The fund, which raised £50 million (about Rs 407 crore), invests in private and public equity investments in India and is advised by an India-based investment team. It has made four investments since its inception across a range of sectors including leisure (EIH), automotive (Mahindra Forging), mobile payment services (Obopay) and building materials (Nitco).