TA Associates invests in mutual fund distributor Prudent Corporate
Photo Credit: Shah Junaid/VCCircle

US-based private equity investor TA Associates said it has bought a minority stake in Prudent Corporate Advisory Services Ltd, an Ahmedabad-based distributor of mutual funds and other wealth products in India.

Prudent will use the investment to scale its business and deepen presence in other states and untapped markets, founder and managing director Sanjay Shah said in a statement.

The statement did not disclose the financial details of the deal.

Dhiraj Poddar, India head at TA Associates, the Indian asset management segment will experience significant long-term growth due to growing investor awareness and increasing mutual fund penetration. “Because of this trend, we have spent a fair amount of time and resources tracking the Indian asset management, distribution and allied services space. We believe that Prudent is well-positioned to capitalise on this large and developing marketplace and can provide notable benefits to India’s growing wealth management sector.”

Poddar will join Prudent’s board of directors.

Prudent provides personal and corporate investment planning services through the distribution of mutual funds, bonds, broking and insurance products. It operates through its network of about 10,000 financial advisers and holds in excess of Rs 18,000 crore of assets under management. The company has 70 branches across 19 states.

Activity in the space

A January 2018 report in The Economic Times said that private equity firms TPG Capital and Warburg Pincus were looking to invest $150-200 million (Rs 950 crore-Rs 1,300 crore) in mutual fund distributor NJ Wealth for a minority stake.

In 2016, Scripbox, an online distributor for financial products, raised capital from Accel Partners and Omidyar Network.

Larger wealth management firms dealing with family offices and rich people’s wealth have also attracted private equity capital. For instance, IIFL Wealth has investors like General Atlantic while Multiples Alternate Asset Management Pvt. Ltd has invested in Sanctum Wealth Management.

TA Associates

Boston-based TA focusses on providing late-stage growth capital to companies in five core sectors—technology, financial services, healthcare, consumer and business services.

In April, VCCircle estimates showed TA may have invested $650-700 million in India across 12 companies over a 12-year period. In terms of investment amount, TA lags behind Blackstone, KKR, Warburg Pincus, Carlyle, Apax and its Boston counterpart Bain Capital.

According to VCCEdge, the data research platform of News Corp VCCircle, the firm’s pace of investments has picked up over the past three years. Seven of the 12 investments were made after January 2015, the data showed.

The private equity firm made two new bets in 2017 in India, on pharmaceuticals firm Ideal Cures Pvt. Ltd and financial services firm Fincare Business Services Pvt. Ltd.

Its other bets include womenswear brand W, drug ingredients maker Shilpa Medicare Ltd, broadband services provider Atria Convergence Technologies, mobile handset maker Micromax, financial technology services firm BillDesk and mining products maker Tega Industries.

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