Investcorp is planning to ramp up investments in India, as the alternative asset manager joins global firms eyeing opportunities in the world's second most-populous country, according to Mohammed Alardhi, executive chairman.
In an interview with Bloomberg News, Alardhi said the middle east firm expects to reach $5 billion of assets in India in the next five years. Currently, it has over $600 million, or 1.5% of the $42.7 billion assets managed by Investcorp, in India.
The investor adds to firms including Ontario Teachers’ Pension Plan Board and Apollo Global Management Inc. that are seeking to extend footholds in India, he said.
Alardhi informed that Investcorp’s plans for the country include a new credit strategy, stronger emphasis on infrastructure deals, and finding a target for its India-focused blank-check company, Investcorp India Acquisition Corp., which raised $259 million in a US initial public offering in May.
Rishi Kapoor, Investcorp's co-chief executive officer, said that the changes in the regulatory environment and digital transformation have made India “a more homogenous country, like the US," to do business. “India’s investment ecosystem is now mature," Kapoor told Bloomberg.
The agency reported that Investcorp, which has among its shareholders Abu Dhabi sovereign fund Mubadala Investment Co., began its operations in India in 2019.
"The midmarket-focused firm has made investments in India across consumer, healthcare, wellness, and financial services, with an overlay of technology," Kapoor said.
Currently, the middle east company is raising another India-focused fund, targeting $500 million, which is more than double its predecessor which wrapped up with $142 million in 2019, according to people familiar with the fundraising efforts.
Given its India ambitions, Investcorp’s latest fund could be even larger than that, the people said, asking not to be identified discussing confidential information. Investcorp declined to comment on the fundraiser.
The asset manager has been expanding holdings from the US to Asia as it seeks to reach assets of about $100 billion. The fund delisted from the Bahrain stock exchange last year after almost four decades in a move it said would give it the agility to expand faster. Mubadala acquired a 20% stake in the firm in 2017.
Investcorp, which typically participates in the last or penultimate pre-initial public offering fundraises, is seeking bigger-ticket deals to keep pace with India’s startups, Kapoor said.
More companies are raising larger pools of capital, and Investcorp’s sweet spot, which used to be about $50 million for investments, is now between $75 million to $100 million, including co-investments, Kapoor said as quoted by Bloomberg.
Investcorp will also focus on providing financing to the portfolio companies of private equity firms, Kapoor said, though declined to say when such a credit fund will launch.