KKR buys India’s Max Financial Services

The firm looks to benefit from ‘robust growth’ in India’s financial services sector.

Global private equity firm KKR has acquired an almost 10 percent stake in Max Financial Services for an undisclosed amount from a group led by Max Group chairman Analjit Singh, according to a statement.

Max Financial Services, previously known as Max India, is the newly demerged entity of Max Group. Max India was split into three business units in January: Max India, Max Financial Services and Max Ventures. All companies are part of the Max Group holding company, which has assets of up to $2 billion. Max Financial Services also owns a 72 percent stake in Max Life, India’s fourth largest private life insurance company.

KKR made its investment from its Asian Fund II, a 2013-vintage vehicle that raised $6 billion and drew commitments from the California Public Employees' Retirement System, Canada Pension Plan Investment Board and New York State Teachers’ Retirement System.

Other investments from the fund include in Dalmia Cement, which the firm exited in January by selling its stake back to the parent company, as well as in Mumbai-based financial services firm Avendus Capital for $105 million, and in media and entertainment investment platform Emerald Media for $300 million, as previously reported by Private Equity International.

According to the statement, the partnership between KKR and Max Financial Services comes as the Indian life insurance sector steadily recovers from a recent slowdown and is poised for robust growth.

Growth potential in India’s life insurance remains high. With about 360 million policies, its life insurance sector is the biggest in the world and is expected to quadruple in size at a compound annual growth rate of 12-15 percent over the next five years, according to data from the India Brand Equity Foundation.