Private Equity, Hedge Funds Size Up India

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Private equity funds and hedge funds are marching into India, and they're looking for managers to leave in place when they march back out.

Some of private equity's biggest names, including Blackstone Group, Carlyle Group, General Atlantic Partners, and Britain's Actis Partners, poured more than $1.3 billion into India last year. The investment continues. Blackstone alone said in May that it would put $1 billion into the Indian economy. And firms are arriving monthly, hiring experienced local staff and opening offices in Bombay, Bangalore, and New Delhi.

"Everybody is pursuing Indian arbitrage," says Kyle Ramkissoon, principal at IJC Partners, a New York-based recruitment firm that specializes in hedge funds. "They're looking for people who can deal with their Indian investments, people who know the lay of the land."

India is currently viewed as ripe for foreign direct investment. Ramkissoon says funds are looking for merger analysts and people who specialize in merger arbitrage. One such firm is one of his clients, a $225 million hedge fund based in New York.

Gene Shen, vice chairman of the Options Group, a recruiting firm in New York, says his firm is seeing the same interest in India.

"India is a hot topic," Shen says. "We've seen a lot of the private equity funds looking at real estate as the entré play into that market. That seems to be the mantra wherever you turn."

Real estate tends to increase as a country goes on a fairly significant industrialization initiative, as India has. And it's sometimes a safer bet than, say, buying a company, Shen says.

"I think a lot of people feel companies can cook the books, but in real estate, that's harder," he says.

Chancing China

Funds are also looking at China, but the rules of engagement in that market aren't as delineated as they are in India. Shen says the jobs in demand are for people with a background in real estate, whether that experience is in India or not.

"But they want us to be creative," he adds. "We might look for people who have been involved in a developing culture that has seen the gradual steps to realizing value and profits. The Japanese REIT market is one where experience gained there might translate into the Indian or Chinese market."

Options Group is also on the lookout for people experienced with distressed assets, distressed companies and turnaround situations. It's critical to find someone on the ground who is engaged and culturally-attuned. Shen says, "Private equity firms are now coming to search firms to find leadership for their investment companies. That's relatively new."

In developed markets, firms sometimes treat their investments as purely financial transactions. In burgeoning markets like India, funds want to install managers who can actually run the companies, and if need be, turn them around. They're asking search firms to find them chief executives, chief financial officers and chief operating officers. In many cases, the candidates are people in their late twenties who have mergers and acquisitions experience.

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