Balakrishnan, Business Standard
2 October 2014
The Indian private equity (PE) sector has, of late, been witnessing
a churn at the top. In the past two months alone, at least six
top executives have quit leading PE firms, citing reasons such
as starting their own funds, a lack of performance by the existing
funds, and entering the e-commerce space, which has recently witnessed
a lot of action.
Among the notable exits is that of Kanwaljit Singh, co-founder
and senior managing director of leading venture capital (VC) fund
Helion. Singh quit two weeks ago to pursue his interest in the
fast-moving consumer goods (FMCG) space, according to a Helion
Singh serves on the boards of Attano, Fashionara, Hurix, HummingBird,
LifeCell, Mast Kalandar, Qwikcilver, Yepme and YLG Salons. He
has also worked with FMCG giant Hindustan Unilever.
Vikram Utamsingh, managing director, Alvarez & Marsal India,
said: In a few situations, the senior PE executives have
had success with their funds and have developed a good track record,
and now feel it is the right time to become entrepreneurs and
raise a fund on the back of their track record.
Another noteworthy exit is that of KKR Indias PE head Heramb
Hajarnavis, who quit this month to set up his own venture. Before
joining KKR in 2010, Heramb was the managing director of Goldman
Sachs principal investment unit.
We have also seen a couple of PE professionals wanting
to move from PE firms that do large-size deals to those that do
small- and mid-size deals, as the volume of mid-size deals is
quite high. This is because the carry fee that PE executives earn
depends on the deals they do and the returns they make on those
deals, said Utamsingh.
According to Sunit Mehra of executive search firm Hunt Partners,
the disputes among founders is one of the major reasons for such
a churn. Most of these firms are partnerships driven by
first-generation entrepreneurs. Over the past four years, this
industry has seen tremendous stress. Inevitably, this phase has
had (and will continue to have) an impact on business fundamentals
of several of these ventures, and, in addition, has tested relationship
between the founders.
However, a few have joined the e-commerce bandwagon, which attracts
a major chunk of talent from India Inc nowadays. Last month, Nishant
Verman, vice-president of venture capital firm Canaan Partners,
had quit the firm to join Indias largest e-commerce platform
Flipkart to take care of mergers and acquisitions. Abhijeet Muzumdar,
former vice-president at Bessemer Venture Partners, joined Amazon
India to get involved in investments and acquisitions in India.
Abhishek Kumar, head of investments at Palaash Ventures, joined
Snapdeal with a similar role.
A mid-level manager in a PE or VC fund is specifically
looking at companies that can be invested in or acquired for further
growth with a relatively short span of time. Well-funded e-commerce
companies that are in a rush to gain both growth and margin are
also looking for acquisitions or partnerships that can provide
them an inorganic boost. So, there are certainly overlaps in the
skill sets needed, said Devangshu Dutta of Third Eyesight.
Recently, Rahul Khanna, managing director of Canaan Partners,
launched a Rs 300-crore ($50 million) debt fund. Khanna is reportedly
quitting Canaan and getting involved with the new venture by the
(Published in Business