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Profile: Multiples Alternative's Renuka Ramnath

  • Andrew Woodman
  • 14 January 2015
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Credited as one of the founders of Indian private equity, Renuka Ramnath built up ICICI Venture before going solo to repeat the act with Multiples Alternative Asset Management. She sees her work as far from over

This month Renuka Ramnath reached a significant milestone in her long career as a private equity investor when her firm - Multiples Alternative Asset Management - completed a first full exit from its maiden fund. The firm sold its remaining 3.67% stake in South Indian Bank for INR1.51 billion ($23.8 million), having already made a partial exit worth INR428 million in July.

The development comes at a time when Indian private equity is hoping for something of renaissance as macroeconomic tailwinds help bolster exits and investor appetite. But even now the industry has grown remarkably since Ramnath arrived over 13 years ago.

A Mumbai native, she started out as an engineering major, earning a degree in textile engineering from Veermata Jijabai Technological Institute. Her interest lay in business and finance, and first-hand experience of the male-dominated world of engineering set her in good stead for what was to come. "I was the only girl in my class," recalls Ramnath. "So early on I found myself competing in with a large of group teenage boys, I think that helped prepared me for the world of finance."

Soon after Ramnath joined the MBA course at the University of Mumbai, she took her first job as a management trainee at Crompton Greaves, a power generation equipment manufacturer. This was followed in 1986 by a switch to finance and a position within ICICI Bank's merchant banking division.

In 1992 she joined ICICI Securities, an investment banking joint venture between ICICI and J.P. Morgan, to head the corporate finance and equities businesses. Five years later Ramnath was back at ICICI to set up the structured finance business, which was followed by a stint in the advanced management program at Harvard Business School. It was the height of the dotcom bubble and Ramnath, like many other would-be investors, wanted to tap this new opportunity.

The first venture

Her chance came when she was tasked by ICICI to set up an e-commerce initiative in Mumbai, eventually becoming managing director and CEO of the INR1 billion EcoNet Fund. Her next big career step came a year later when she took over the leadership of ICICI Venture following a decision to merge it with the e-commerce division. The transition was anything but smooth.

"It was a big change," recalls Ramnath. "At first I wasn't sure whether I should shift to Bangalore or continue from Mumbai, or what team I would put together, and who would be best to take the company forward."

Not only was Ramnath charged with changing the strategy of the firm - moving away from early-stage investment to focus on growth and control deals - but she also needed to raise a new funds with at least 75% of the capital coming from third-party sources. By now it was 2001 and markets slowly recovering from the dotcom bust had been left reeling by the September 11 terror attacks in the US. It was not a good time to raise money.

"On top of that I had no track record, I was changing the strategy of ICICI Venture, and many of the old-timers had already departed the company, so the new team had almost no exposure to private equity," recalls Ramnath. "I had a huge legacy portfolio - which looked very weak, largely because these were very young companies. All the factors that could be set against us, were set against us."

Ramnath recalls one of her biggest motivators in those early days was her children. After tragically losing her husband in car accident in 1995, she had become the sole provider for the family.

"I had this huge pressure to make money so I could send them to good schools and give them everything they needed," she says. "It was a challenge giving up my previous position and stock options with ICICI but I knew I would be better aligned with ICICI Venture. I had to give something up to get something else."

Fom growth to buyouts

ICICI Venture launched its India Advantage Fund I & II, Series I and completed early growth investments in the likes of PVR Cinemas and Bharat Biotech. The GP then branched out into control deals and carve-outs such as Ranbaxy Laboratories and the refractory division of Associated Cement Companies. ICICI went on to raise $1 billion for the second series of the India Advantage Fund, of which $200 million was later returned to investors.

This was followed by two parallel real estate and mezzanine vehicles.
By 2009, Ramnath had built up enough of a track record to strike out on her own and opted to focus on mid-market growth deals.

"Our strongest capability was in evaluating management teams and business strategies, bringing in good governance practices and doing things like raising debt," she says. "I wasn't interested in backing tech entrepreneurs trying to develop something new; I was more interested scaling up proven business models and helping them go public - because that is what we did best."

The maiden fund closed on target at $450 million in late 2011, with commitments from the likes of the UK's CDC Group, Canada Pension Plan Investment Board, Kuwait's Public Institution for Social Security and Dutch pension fund PGGM.

The process has been quicker with Fund II which is already halfway to its $650 million target (comprising a $500 million core fund plus a $150 million co-investment pool), having launched in the middle of last year. A final close is expected by September.

Although now an industry veteran, the Multiples CEO is keen to continue making her mark on Indian private equity for many years to come.

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  • Multiples Alternative Asset Management
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