Religare Enterprises Ltd said on Thursday it will sell its entire stake in Landmark Partners to the management and other minority shareholders of the US-headquartered private equity fund house for an undisclosed amount.
The move will virtually end the Indian financial services company’s exposure to the alternative investment management business it entered five years ago with two back-to-back transactions where it acquired Northgate Capital and Landmark Partners.
VCCircle had first reported on April 26 that Religare was to sell its majority stake in Landmark, as it consolidates its business around lending and other domestic financial services units. A person privy to the deal had said the transaction was likely to be sealed this week.
Landmark focuses on private equity and real estate secondaries markets. It had assets under management of $15.1 billion with about 16,000 underlying company and property investments, according to its website. That’s nearly double from $8.5 billion when Religare bought a majority stake in 2011.
It had consolidated revenue of Rs 604 crore with net worth of Rs 203.7 crore for the year ended March 31, 2015.
Landmark raised $6 billion in the financial year 2014-15, according to its last annual report. In comparison, all large India-focused PE fund houses have under $4 billion in assets under management. Although Landmark did not have a significant presence in India, its majority ownership made Religare the biggest Indian firm in the PE fund management business in terms of global assets.
The US firm is a step-down subsidiary housed under Religare Global Asset Management (RGAM). Landmark has 29 funds in its kitty that focus on venture capital, buyout, mezzanine and real estate partnerships.
Religare, controlled by billionaire brothers Malvinder and Shivinder Singh, had bought 55 per cent of Landmark for $171.5 million in April 2011. It held 53.75 per cent stake in the firm as of March 31, 2015.
Landmark was the bigger of two alternative investment platforms in which Religare bought a majority stake in 2010-11.
Last week, Religare said it was selling the other firm--Northgate Capital--as part of its business strategy. Northgate’s assets have risen 60 per cent to $4.8 billion over the past five years.
Last week, Religare chairman and managing director Sunil Godhwani had said that the company had taken a “strategic view” to consolidate and refocus on its existing lending and other domestic businesses given the growth potential that India offered.
Religare has also invested in two India-related PE and VC firms—South- and Southeast Asia-focused healthcare investor Quadria Capital and Indian angel fund YourNest.
Buying and selling
For Religare, the deal for Landmark adds to business exits in the recent past as it consolidates its business. The company, which offers loans to small and medium-sized companies and also provides capital markets, wealth management, health insurance and asset management services, has been scaling back its asset management business.
In November, Religare said it would sell its majority stake in the Indian asset management joint venture--Religare Invesco Asset Management Company--to foreign partner Invesco Ltd. Also last year, Religare sold its stake in its life insurance JV. Bennett, Coleman and Co Ltd, the Indian media conglomerate better known as the Times Group, acquired Religare’s stake in Aegon Religare Life Insurance Co Ltd while foreign partner Aegon hiked its holding to 49 per cent.
The Singh brothers, who had earlier sold the group flagship Ranbaxy to Japan's Daiichi Sankyo (last year Sun Pharma acquired Ranbaxy), had in the past too made quick moves in buying and selling assets. They had made a big move in the hospital business when they bought a stake in Singapore's Parkway.
After losing a takeover battle with Malaysian sovereign fund for Parkway, the Singh brothers went on an aggressive Asia-Pacific acquisition spree in healthcare service business. Soon thereafter, they lent money to their own public listed healthcare firm Fortis to buy these assets, only to sell almost all of these assets within a short period to focus on the domestic market.