Investcorp acquires PE business of India's IDFC

The purchase is intended to give Investcorp immediate access to India’s growing private equity and real estate market through IDFC’s team of around 20 professionals. It follows the firm’s entry into China last year with a $150 million commitment to China Everbright’s New Economy Fund. Financial terms of the transaction have not been disclosed, but according to a release regulatory approval has already been granted.

Investcorp was formed in 1982 and had $22.3 billion in global assets under management (AUM) as of September 2018, across a range of strategies including private equity, real estate, credit, and absolute returns. It claims to have invested over $36 billion across more than 150 PE deals since its founding.

IDFC Alternatives’ private equity and real estate divisions currently manage two funds each, with total (AUM) of around $430 million. The PE funds, the latest of which reached a first close of $100 million in 2017, focus on consumption-driven businesses in the healthcare, consumer products, financial services, media, and food and agriculture sectors. The majority of investments are expected to be minority growth deals, but build-outs and platform transactions feature significantly in the fund’s strategy as well.

In recent years IDFC Alternatives has focused on exiting investments from its third fund. Last year it sold its remaining stake in wind and solar power producer Sembcorp Green Infra to Singapore-based Sembcorp Utilities for INR14.1 billion ($220 million). The exit, IDFC’s largest to date, represented a 3.2x multiple and brought the third fund’s multiple on investment capital to 1.8x as of March 2018, according to IDFC’s latest annual report.

The sale of the PE and real estate business follows the divestment last year of IDFC Alternatives’ infrastructure business to Global Infrastructure Partners. Also last year, the Indian government-backed National Investment & Infrastructure Fund agreed to acquire IDFC Infrastructure Finance, a non-banking finance company owned by IDFC.

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• Topics
• South Asia
• Buyouts
• Real estate
• Buyout
• Growth
• India
• IDFC Private Equity