The investment firm, which entered India in 2018 through the acquisition of IDFC Alternatives‘ private equity and real estate funds, has grown its assets under management (AUM) from $180 million to approximately $800 million in 2023.
“In the last five years, we got to know India very well, the team has really formed well, so the foundation is solid. And now, because of what we are seeing in India, the growth of the economy, the transformation that has happened, we believe that we can set a target of $5 billion AUM in the medium term,” said Alardhi.
He added that with the planned growth in India business, the Indian portfolio will become a bigger part of its global business, growing from around 2% of its $50 billion AUM today to 5%.
As Investcorp looks to expand its presence in India, it is also looking at entering more asset classes and going beyond private equity and real estate.
“As you know, globally, we do six things: we do private equity, real estate, infrastructure, credit, GP stakes, and we have a hedge fund. All these are businesses and strategies that we’ve been doing for a long time. Some fit India much better, like our expertise in private equity and real estate. I think there are some, where we need to maybe do more work, things like infrastructure and maybe credit down the line,” said Alardhi. Investcorp in India has invested in companies such as XpressBees, FreshtoHome, NephroPlus, Unilog and NDR Warehousing. Some of its exits include luggage maker Safari, consumer lending platform InCred and eyecare chain ASG Eye Hospitals.
ET BureauRishi Kapoor, co-CEO of Investcorp, added that as part of its growth plans, the firm will be scaling up the individual ticket size in its private equity business and focusing on real estate adjacent sectors of warehousing and education infrastructure.”When we started this journey back in 2018-19, we were doing $15 million equity tickets. Our most recent deals have been north of $100 million. That gives an illustration of what the likely trajectory of growth is going to be on that front.” “And we’ve added additional capabilities on the real asset side with warehousing and schools, or educational assets. Broadly speaking, operationally intensive real assets, and larger private equity deals, those are the two founding pillars,” said Kapoor.
On the warehousing front, Investcorp is contemplating setting up a dedicated fund for the strategy in India, like its Indian private equity and real estate funds.
“Whilst we started off warehousing those deals on our balance sheet, actually, we’ve syndicated those to our investors, as individual co-investments. But going forward, we see a pretty benign opportunity, if you will, to approach the logistics and warehousing space in India through a dedicated fund structure,” said Kapoor.
The firm also wants to invest in greenfield warehouse development as it moves forward.
“We will leverage that experience thus far with NDR and perhaps widen the funnel a little bit to work with another one or two operators as well, but also go a little bit more upstream to greenfield development rather than just existing brownfield assets,” said Kapoor. Investcorp has invested close to ₹1,000 crore with NDR Warehousing. The firm sees the already strong flow of capital from the Gulf countries to India increase further significantly given the strong government-level relations and alignment of interests.
“Around 90% of the capital that we brought into India is private money; it’s not sovereign funds. This really says that there is confidence in India and in the story of India. It also says that India, within the emerging market, is standing as a strong destination of capital from the Gulf,” said Alardhi.
