Wexford Capital lines up $100 mn PE fund for lndia

PRIVATE EQUITY WATCH

Wexford Capital, a US-based investment adviser with assets under management of nearly $7.5 billion, is planning to invest around $100 million in Indian private equity in the next 12 months through its Indian partner, Baseline Capital Advisors.

Though Wexford Capital has been investing substantially in public securities in India, its current investment plans mark the beginning of its private equity foray into the country and would be exclusively handled through Baseline, the first private equity company to operate from Hyderabad.

The initial investment is expected to be made in 3-5 companies, mostly based out of Hyderabad.

"Funds under our management are tied up for up to 12 years. Hence we are looking at strategic investments in India and not quick profits," Joseph Jacobs, co-founder of Wexford, said in response to a question on whether they have any time frame with regard to exit routes.

However, on a medium to long-term, the company expect a 2-4 times return on its private equity investments in the country. It would pursue opportunities in India in a variety of sectors including energy, infrastructure, natural resources and technology.

The company is aiming to position its private equity in the country as predominantly growth capital, targeting companies looking for opportunities to go to the next level.

Bharani Bobba, one of the five partners and a promoter of Baseline, said they were negotiating with several companies for private equity investments and deals with some of them was expected to be concluded this year itself. Baseline also has an office in New York.

Wexford Capital would provide the entire funds required for the investment opportunities which Baseline is scouting for. For future deals, Baseline's partners would also invest up to 10 per cent, according to Ramesh Babu Byrapaneni, another partner of the newly-floated private equity company.

"It takes 12-18 months to raise a fund for equity investments. Now, immediate capital is available through our partnership with Wexford Capital," Brooks Schaden, also a Baseline partner, said citing reasons for not raising the investment funds on its own.

Speaking on the investment opportunities in India, Howard Endelman, another partner, said, "The total private equity flow into India is $10 billion this year, while the Indian government is talking about over $500 billion investments in infrastructure alone."

All the US partners of Baseline have decided to spend half of their time working from Hyderabad.