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Guggenheim enters India fund of funds business

The global financial services firm will acquire control of the India-focussed fund of funds business of San Francisco investment bank Thomas Weisel.

As the investment bank’s shares reel, Thomas Weisel Partners has agreed to transfer ownership of its fledgling India-focussed private equity fund of funds business to Guggenheim Partners, according to a source familiar with the transaction.

The fund of funds firm includes eight professionals and is headquartered in Mumbai. The team is led by KV Dhillon, who has been with San Francisco-based Thomas Weisel since 1998.

The firm is currently in the market with its first fund, called Thomas Weisel Partners India Opportunity Fund. The fund has current target of $100 million, although the target may be significantly expanded. The India team has previously committed third-party capital to private equity funds. Guggenheim Partners’ placement division is leading fundraising for the new limited partnership vehicle.

New York- and Chicago-based Guggenheim Partners, which has several asset management and capital markets divisions, is not entirely new to India. The firm’s infrastructure investment affiliate has completed two transactions in the country. Guggenheim is expanding into other emerging markets, as well. The firm recently received a license from the Dubai Financial Services Authority to open an office there.

Thomas Weisel agreed to transfer ownership of the India fund of fund's management company to Guggenheim on or before September 30. The source said the investment bank is focussing on its core businesses amid market turmoil.

At the beginning of 2007, Thomas Weisel’s stock price was above $20 per share. Today shares are trading near $5.00.