Asia-focused private equity investor PAG has made primary and secondary investments worth Rs 2,366 crore ($326 million) in Edelweiss Wealth Management (EWM) to acquire 61.5% stake.
As part of the deal, the private equity firm is acquiring the entire ownership of Kora Management and Sanaka Capital. Edelweiss will continue to hold 38.5% stake in EWM as earlier envisaged, with the option to increase it further to up to 44%, a filing stated.
Last August, VCCircle reported that PAG had signed an agreement to pick up a majority stake in EWM, the second-largest non-bank wealth management business in India.
PAG and Edelweiss will work together towards demerger and eventual listing of the business.
In an interview with VCCircle this month, Nitin Jain, managing director and chief executive of EWM, said the listing should take another 12-15 months.
A week ago, EWM launched its third fund of target corpus Rs 5,000 crore ($700 million) that aims to bet on late-stage private equity and pre-IPO firms.
PAG, a leading private equity investor in Asia’s fast-growing economies, is especially keen on the Indian market, where it expects to invest more than Rs 7,000 crore in total over the next two to three years.
EWM, which reported revenues of Rs 880 crore and profit after tax of Rs 180 crore for the first nine months of 2020-21, comprises the wealth management and capital markets business servicing over 2,400 of India’s wealthy families and around 670,000 affluent and high net-worth individuals (HNIs).
Its customer assets under advice now amount to Rs 1.45 trillion, a 43% CAGR from Rs 185 billion around six years ago in 2015.
The company estimates India’s Rs 300 trillion wealth management industry to grow at 12.5% per year to Rs 540 trillion after five years.