Chip Kaye, chairman, Warburg Pincus
“India is the world’s largest Private equity target for us outside the US. It has always been one of our most important markets globally. In many ways, I think our presence in India and the ecosystem we have created here may be one of the firm’s most defining characteristics, not just within India but also outside of it more broadly,” said Chip Kaye, president of Warburg Pincus.
Kaye and Jeffrey Perlman, the firm’s CEO, along with other senior executives are in India to celebrate their 30-year investment journey. The firm, which started with supporting entrepreneurs and businesses like Sunil Mittal, HDFC, IDFC, among others, has supported 80 companies in the last three decades.
“We are currently investing several billion dollars in India every year,” said the firm’s India head, Narendra Ostawal. “You could say we are investing more in one year than we would in a decade. This shows the level of our commitment to the region.”
Touching on how the company operates in a world defined by geopolitical realignment, supply chain restructuring and rapid technological change, especially in the field of artificial intelligence (AI), Perlman said that India stands out in this context. “India combines scale with growth, growing domestic demand and a deep entrepreneurial ecosystem. And with increasingly complex capital markets, which we think are critical to the success of any investor or investment franchise, I think India continues to stand out in a world of structurally higher rates.”
Distribution of returns
According to Perlman, the firm is probably one of the few private equity firms that meaningfully deploys more capital to its investors than it invests in the (Indian) market. “This is a rare occurrence,” he added.
The firm is pursuing classic private equity-style deals, acquisition opportunities and real estate in India. Perlman added that the firm also smelled the opportunity to bring its capital solutions business to India.
“This is a market where we’re currently investing probably more than a few billion dollars a year in private equity, real estate, and ultimately hopefully future areas like capital solutions,” Perlman said. The number of buyouts with majority control has also changed. The company’s business has evolved over time, but the scale of this opportunity is different from even 10 or five years ago.
indian companies “This is another big opportunity for us,” Perlman added, noting that they are increasingly looking beyond their own national borders, creating opportunities that span multiple markets that require partners with global resources and capabilities.
Since its entry into India, some of its global peers, including Blackstone, KKR, Carlyle, Bain Capital, EQT and General Atlantic, have set up shop and are now vying for a bigger slice of the growing private equity pie in India. When asked if increased competition is making things harder for them, Perlman said, “There’s more capital coming in on the front end to take advantage of the opportunity that’s emerging here. Because in private equity, you need more capital for exits.”
Earlier this year, Bharti Enterprises and Warburg Pincus jointly Acquired 49% stake in Haier India, a subsidiary of Haier Group. The private equity firm also acquired a 41% stake in Fleur Hotels in January.
The investment firm has more than $100 billion in assets under management globally and its current portfolio includes more than 215 companies, diversified across stages, sectors and geographies. Warburg has invested in more than 1,000 companies across private equity, real estate and capital solutions strategies.
