In acquisition mode

BACKSTAGE

Jason N Ader, 38, made headlines last week as the new prospective buyer of the immensely popular Nirula's chain of restaurants. Based out of New York, Ader is credited for setting up the first acquisition fund for Indian assets in hospitality. He had listed the fund "" India Hospitality Corporation (IHC) "" last year at London's Alternative Investment Markets and raised $100 million.

He said he would focus on acquiring hotels in the three- to five-star category as well as serviced apartments, restaurants and timeshares.

While Ader might not have been well-known in India prior to this acquisition, his credentials are highly regarded at Wall Street. Ader's father had made a career in real estate and wanted him to follow in his footsteps, but Ader was always fascinated by Wall Street and had started buying stocks as a teenager.

He founded and currently serves as the president and chief executive officer of Hayground Cove Asset Management, a New York-based investment management firm with more than $1.5 billion of assets under it. Ader's intensive approach to research had led Bear Sterns & Co to hire him in 1995, making him one of the youngest senior managing directors in the firm's history. Here, Ader built a reputation of a top analyst in the gaming, lodging and leisure industries. He had also covered the gaming industry as a senior analyst at Smith Barney, which Ader joined in 1993.

A strong believer in research, Ader has obviously done his homework on India. He saw the obvious opportunities available in Indian hospitality and decided to incorporate IHC. Its board of directors "" besides real estate and hospitality specialists "" also includes Pawan Munjal of Hero Honda Motors and former bureaucrat Rajeev Talwar.

IHC fund set the ball rolling last week for its first acquisition "" Mars Restaurant and SkyGourmet Catering from Navis Capital Partners, a Malaysian private equity firm, for $110 million. Ader was linked with Nirula's simply because Navis Capital is the majority shareholder in the latter. Samir Kuckreja is a minority shareholder and is Nirula's chief executive officer and managing director.

Attempting to quash rumours, Nirula's issued a press release stating that Navis Capital Partners and Kuckreja would retain their stake in Nirula's subsequent to the purchase of Mars Restaurants and Sky Gourmet by IHC.

IHC, however, in its press release, had stated that based on certain conditions, it could exercise the option to later acquire Nirula's. To this, Nirula's stated that despite Navis Capital being in initial discussion with IHC for part sale of stake, management control would remain with Navis and Kuckreja even after the deal.

Ader, meanwhile, has managed to gain a strong foothold in India. His fund now owns Mars which has a diversified portfolio of restaurants, with eight primary brands including the popular Not Just Jazz By The Bay, Tendulkar's and All Stir Fry.

Mars also operates two Gordon House Hotels in India, which Ader is planning to aggressively transform into a chain across the country.

While listing IHC at AIM, Ader had sold "units" to his investors which comprised one common share and two warrants. When the stock hits $8.50 (currently trading around $6.35), the warrants can be called. That will capitalise the fund with an additional $170 million, which will obviously come in handy for future acquisitions.