India’s Religare to go global in $1bn push

Indian financial services firm is acquiring a controlling stake in private equity firm Northgate Capital as part of plans to invest up to $1bn in asset management businesses around the world.

Religare Enterprises, a New Delhi-based financial services group focused on emerging markets, is acquiring a majority stake in Northgate Capital, a private equity and venture capital firm. The move is part of plans to invest up to $1 billion in asset management businesses globally.

Northgate has offices in California and London. According to the terms of the deal, Northgate’s five partners will retain controlling interests in Northgate’s General Partner entities and a significant stake in the fund management company, Religare and Northgate said in a joint statement. The firm will see no changes to its management team, investment staff, investment committee or investment strategy.

Northgate manages venture capital and private equity funds which invest directly in companies and make commitments to other private equity and venture capital managers as well. The firm manages about $3 billion for more than 400 institutional and high net worth individuals. 

The transaction is subject to regulatory approvals, according to the statement. 

Religare intends to partner with asset management firms from around the world operating across various asset classes and investment disciplines. The firm will provide strategic support and capital to these managers and help facilitate their growth, whilst leaving the existing management in charge of day to day operations. 

“This partnership will accelerate our process of seeking similar partnerships in other asset classes, including both alternatives and traditional in developed and emerging markets,” Sunil Godhwani, chief executive officer and managing director of Religare, said in the statement. 

The partnership with Religare gives Northgate an industrial and capital markets partner in the emerging world, Hosein Khajeh-Hosseiny, partner and head of global private equity at Northgate, said. “Religare will uniquely strengthen our industrial and capital markets insights and solidify our presence, access, and investment due diligence in the emerging markets, especially Asia,” he added. 

Jefferies & Company and Religare Capital Markets acted as financial advisors to Religare Enterprises. Northgate was advised by Credit Suisse Securities. 

Religare already has two private equity tie-ups in India. In April 2009, Religare’s private equity arm Religare Venture Capital formed Milestone Religare, a joint venture with Mumbai-based private equity and real estate firm Milestone Capital. Milestone Religare is targeting commitments of INR6 billion (€96 million; $131 million) for India Build-Out Fund I, its maiden fund focused on education and healthcare, and has raised more than half the amount by September 2009. 

The firm also owns a 74 percent stake in Vistaar Religare Capital Advisors, which manages the $40 million Vistaar Religare Film Fund, a private equity vehicle investing in films and production companies. 
According to industry sources, the firm is also looking to set up a dedicated Asian fund of funds vehicle with a focus on commitments to private equity funds investing in China and India. 

Religare Enterprises provides asset management, life insurance, wealth management, equity broking, commodity broking, investment banking and lending services.

Religare Enterprises was not immediately available for comment.