Anil Ambani enters private equity space

MUMBAI: Anil Ambani has quietly entered the fledgling private equity space. His financial services arm, Reliance Capital, has launched a whollyowned subsidiary, Reliance Equity Advisors Ltd (REAL), to offer the entire bouquet of private equity services. Ramesh Venkat, group CFO of the Anil Dhirubhai Ambani Group (ADAG), has been given the additional responsibility of spearheading REAL.

To begin with, REAL has put in place a 15-member advisory team and received regulatory approval to build an initial corpus of $1 billion. Of this, ADAG will contribute 15-20% while the balance will be mobilised by two linked funds, one based in Mauritius and the other in India.

Mr Venkat told ET that REAL has started talking to investors to put together a $1-billion fund. “The initial response has been very good. There is good investor appetite for our fund. We expect to close the fund in a few months,” he said. Mr Venkat is a director of REAL.

Mr Venkat said the fund will focus on sunrise sectors such as services, logistics, realty and pharma. The ticket size of investment will be in range of $15-100 million. In addition to providing growth capital and means for financial restructuring, REAL will lend money and expertise to help Indian companies in acquiring foreign assets.

This initiative is completely different from Reliance Capital’s PE avatar. While Reliance Capital has been acting as a proprietary PE investor, REAL is an advisory PE player. In other word, Reliance Capital invests with its own money while Reliance Equity Advisors uses money from investors to put in companies.

Like any other PE advisor, Reliance Equity Advisors will earn fees against its advisory services. The scale of operations is different as well. Reliance Capital had a maximum PE investment of Rs 2,000 crore while REAL will kick-start its operations with a $1-billion fund. Some other funds will be launched once the first fund is saturated.
thanks to :- economictimes.indiatimes.com