Cerberus Capital comes knocking

Cerberus Capital, the New York-based private equity (PE) fund that recently bought Chrysler from the erstwhile DaimlerChrysler for close to $7.5 billion, is entering the Indian market shortly.

The PE fund, which manages close to $25 billion, is finalising the appointment of a chief executive for its Indian operations.

Cerberus closely follows exploratory moves by Kohlberg Kravis Roberts, another giant PE fund, to enter India. In addition to the US, Cerberus is present in London, Frankfurt, Tokyo, Osaka and Taipei, and holds controlling or significant minority interests in companies around the world that collectively generate annual revenues of over $60 billion.

A spokesperson for the company offered not to comment, but added that Cerberus was always looking for "emerging opportunities" and India was an "emerging economy".

Cerberus's entry adds to booming PE investments in India this year with global giants like Blackstone, Carlyle, Texas Pacific Group and Temasek setting base here.

In the first six months of this financial year, PE investments stood at $10 billion and are expected to scale $14 billion by the end of the year, over four times of the $2.27 billion PE investments in 2006.

A section of the Indian PE industry is already wondering how to handle such competition. "In an already scarce specialised manpower scenario, funds like Cerberus will just whisk away people. Compounding this will be the kind of leverage these global giants will bring to the deal tables.

Funds in the range of $1 billion will just not be able to match them," an industry player noted.

For the record, in Greek mythology, Cerberus or Kerberos, was a monstrous three-headed dog with a snake for tail that guards Hades, the Greek god of the dead.