Investcorp moves into India with PE unit acquisition

The deal, which involves the private equity and real estate assets of IDFC Alternatives, is the latest in the firm's efforts to reach $50bn in AUM.

Investcorp has acquired an Indian private equity and real estate unit, its first direct deal in the country, as part of a wider push into Asia.

The Bahrain-listed firm has secured regulatory approval to buy the investment management arm of IDFC Alternatives, according to a statement. The deal includes approximately $430 million of assets under management across private equity and real estate.

Asia is a focus for expansion for Investcorp, which committed $250 million, including co-investment rights, to China Everbright’s New Economy Fund in September.

Investcorp had $22.3 billion of AUM at the time – a figure it is hoping will reach $50 billion over the “medium-term”, a spokesman told Private Equity International in January.

The firm signed a $1 billion GP-led restructuring process with secondaries firm Coller Capital at the start of the year amid plans for a more institutionalised investor base.

It closed Investcorp Technology Partners IV, a North American-focused 2016-vintage, on $400 million in December, according to PEI data. The firm had been investing on a deal-by-deal basis in private equity since its 2007-vintage previous blind-pool fund, as well as its Gulf and Turkey-focused vehicle, which closed in 2008.

Private equity in India is on an upswing, with steadily improving returns the main reason for investor confidence in the market. In recent years the market there has focused efforts on exits and returned more capital to investors, with exit value growing to $10.8 billion in last year from $6.9 billion in 2015, according to the Indian Private Equity: Coming of Age report from McKinsey & Company.

India-based managers gathered $6 billion in capital commitments from 2015 to 2017, 50 percent more than the previous three years combined, according to the report. Private equity firms have invested more than $97 billion in India since 2003, with more capital deployed in 2017 ($13 billion) than in any year since the global financial crisis.

 Carmela Mendoza contributed to this report.