Partners Group eyes PE potential with first India office

The Swiss alternatives firm says it will target private equity deals from its new Mumbai base against a backdrop of falling valuations and growing accessibility of controlling stakes.
Partners Group eyes PE potential with first India office

Swiss alternatives firm Partners Group has launched its first office in India in preparation for ramping up direct investment deals in the country.

The Mumbai operation is headed by Cyrus Driver, who joined the firm in 2012 as a managing director specialising in direct investments in the country. He has relocated from Singapore, along with two senior executives from the firm focused on Indian investments.

An additional senior executive is expected to join later this year, and the firm says it has plans to expand the team in coming years.

Having an on-the-ground presence will help the team to source deals and manage portfolio companies more efficiently, Driver tells AsianInvestor.

“The India office, to start, will focus on private equity. We’re continuing to cover real estate and infrastructure investments, in which we are also active in India, from the regional team in Singapore,” he says.

Partners Group has been investing in India since 2006. As the private equity deal sector hit a peak there in 2008, the firm says it found valuations to be high.

“Through a period between 2008 and 2011 or 2012, we were quite light in our investments compared with the size of the economy,” says Driver, who adds that valuations have since moderated. “We were finding that the risk-reward balance was becoming quite attractive.”

Partners Group last year took a majority stake in IT support provider CSS Corporation, which is headquartered in the US but has a large workforce in India, and EuroKids, one of India’s largest private pre-school chains.

“We look at businesses that have scale and a significant position in their key markets,” says Driver. “We’re actually finding a reasonable number of those opportunities.”

Partners Group prefers to take majority stakes or significant minority shareholdings in the companies in which it invests.

Acquiring a majority stake in Indian businesses has become easier, Driver argues. “Entrepreneurs are now more realistic as to whether it’s time for them to hand over ownership to someone else that can take the business further, or whether they really have the capabilities to handle the increasing challenges of globalisation,” he notes.

Partners Group is eyeing the health-care, IT services and financial services industries in India for potential deal opportunities, notes Driver, who says the firm has no sector preferences.

The Mumbai office’s launch comes as India’s 814 million eligible voters go to the polls in a general election that pits business-friendly Indian People's Party candidate Narendra Modi against the Indian National Congress’ Rahul Gandhi. Voting started on April 7 and is due to end on May 12.

Driver says the timing of its India launch and the election is coincidental.

However, he adds that Partners Group has avoided businesses in India that depend on conducive regulatory changes. “There does seem to be a move to bring the economy back on a stronger growth path and ... [there’s] a recognition of how a stable regulatory environment is beneficial for investment. Hopefully that will improve, but we’re not assuming that it will," he states.

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