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Religare sells edu-infra fund Cerestra to TCP

01 August, 2016

Financial services firm Religare Enterprises Ltd has sold its real estate private equity arm, Cerestra Advisors Ltd, to London- and Dubai-based private investment firm The Capital Partnership Group Ltd (TCP) for an undisclosed amount.

The deal marks TCP’s entry into the Indian real estate investments segment. This is Religare’s second deal with TCP in less than six months. In April, TCP bought the venture capital and private equity assets of US-based Northgate Capital as Religare started exiting its alternate asset management business.

Religare said in a stock market disclosure that Cerestra reported revenue of Rs 25 lakh in 2015-16, or about 0.004% of the company’s consolidated revenue.

TCP was co-founded by veteran investment bankers Ali Ojjeh and Ahmed Ben Halim. It runs public markets funds and provides venture capital, private equity, real estate and wealth advisory services from its London and Dubai offices.

VCCircle had first reported that Religare was setting up a real estate-focused PE arm that will pool in assets for listing them eventually. The firm last year came out with a concrete plan to raise a Rs 1,000 crore fund to invest in education infrastructure across the country.

The fund’s aim was to buy properties on which educational institutions run and then lease them back to the same firm. In effect, the fund aimed to pick up a stake in assets such as properties on which schools and colleges run. The pool of assets was intended to be listed under a real estate investment trust, an investment product for raising long-term capital for realty projects.

Cerestra, housed under Religare subsidiary RGAM Investment Advisers Pvt. Ltd, struck several deals in the recent past. Earlier this year, it was set to acquire the realty portfolio that houses K-12 schools of Bengaluru-based Jain Group of Institutions.

In March, the firm sealed a transaction with Mumbai-based Witty International Group. It was also in early talks with Dubai-based Global Education Management Systems International School to acquire one of its assets in India.

RGAM’s divestment strategy

This sale was in line with Religare’s strategy to divest its alternative investment management businesses that it had started five years ago. Religare chairman and managing director Sunil Godhwani said in April that the company would refocus on its lending and other domestic businesses.

Religare Global Asset Management (RGAM), a platform with around $20 billion of assets, has sold several of its affiliates under its banner, namely private equity unit Northgate Capital and venture capital arm Landmark Partners.

It was also looking to sell its portfolio management service business, an offshore fund management business focused on Africa and an SME-focused PE fund chasing deals in the education and healthcare space.

Religare has exited several businesses in the recent past. In November last year, it announced 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 to Bennett, Coleman and Co Ltd, the media conglomerate better known as the Times Group, and foreign partner Aegon.

Religare’s billionaire promoter brothers Malvinder and Shivinder Singh, who had earlier sold the group flagship Ranbaxy to Japan’s Daiichi Sankyo (last year Sun Pharma acquired Ranbaxy), had in the past as well made quick moves in buying and selling assets. A few years ago they bought a stake in Singapore’s Parkway hospital chain and then went on an aggressive Asia-Pacific acquisition spree in the healthcare services business, but they sold almost all these assets within a short period to focus on the domestic market.

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Religare sells edu-infra fund Cerestra to TCP

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