Blackstone Group Earmarks $1B for India

The Blackstone Group has allocated $1 billion from existing funds to seek investments in India, PE Week has learned.

The New York-based investment bank and advisory firm (which manages more than $14 billion in private equity assets) late last month opened an office in Mumbai, India, which is headed up by Akhil Gupta, chairman of Blackstone Group India Private Ltd.

Before the office opened, Gupta had been working from a hotel room at Bombay’s historic Taj Hotel, interviewing job candidates and scouting locations. From his hotel, Gupta said he expects a staff of 10 in the new Mumbai office.

“The $1 billion from existing funds will provide us with working capital over the next three to four years,” Gupta says. “But once we’ve demonstrated that there is deal flow here, and high quality deals, I’m confident that we’ll raise a dedicated fund for India.”

Gupta was previously CEO of Reliance Industries – one of India’s largest industrial companies – but was hired recently to manage Blackstone’s effort in India.

Gupta says that the investment profile for his group in India will mirror that of the organization worldwide. “We’ll be sector agnostic, in minority investments, control investments, PIPES, and buyouts,” he says. However, while Blackstone typically doesn’t invest less than $100 million in its deals, in India the deal size will go as low as $25 million, Gupta says.

Other firms, such as Warburg Pincus and Temasek (one of the investment arms of the Singapore government), have been working successfully in India for quite a while.

But other firms are stepping up their India efforts.

Henderson Private Capital is raising its second Asian fund, a $400 million pan-Asia growth capital fund that will invest in India and throughout Asia (see PE Week, 5/30/05). Henderson already has eight professionals in New Delhi, Singapore and Hong Kong.

Also, Zurich-based Capvent, a fund-of-funds, has announced plans to form a $150 million fund to invest in India (see PE Week, 5/2/05). The firm has a staff of 10 in Bangalore, India, where it has been working for two years, studying the market and making co-investments in Indian companies.