MUMBAI-born
Manish Kejriwal is currently the busiest private
equity dealmaker in town, having taken charge recently
at Temasek India Advisors, the Indian arm of Singapore-based
investor Temasek Holdings. The former McKinsey partner,
who was part of the global leadership team of the
firm's private equity practice among other responsibilities,
terms his entry into the private equity industry
as a 'bit more entrepreneurial' compared to consulting.
As managing director of Temasek he certainly doesn't
have to try too hard to find deals; with $500 million
already invested or committed to the Indian market,
it is already the second-largest private equity
investor in India, after Warburg Pincus.
In his first interview to the media after taking
over in January this year, Kejriwal tells Snigdha
Sengupta about Temasek's game plan for India:
How is Temasek's investment
theme in India different from those of other Pan-Asian
private equity funds that are active here?
Temasek's aim is to maximise long-term shareholder
returns as an active investor and shareholder. This
is what makes us different from the other Pan-Asian
private equity funds active in India. The fact that
we are not structured as a fund means we can afford
to take a long view on investments, as we do not
need to divest our holdings within a certain period
of time -- we have a lot of flexibility in our investments.
As a supportive, long-term shareholder we are prepared
to work with our portfolio companies to build sustainable
value.
Furthermore, unlike other funds, we do not have
a fixed allocation in terms of investment amounts.
What is more important to us is to put our money
where we see value, and where we feel we can be
a partner for growth. The fact that we are a majority
shareholder in many companies, which are regional
and global leaders, also allows us to draw on our
shared experience and networks.
What kept you from
entering the Indian market as a direct investor
before 2003?
After surviving the 1997 economic crisis, 9/11
and SARS (Severe Acute Respiratory Syndrome),
Asia is once again making a steady recovery and
we are optimistic about its medium and long-term
prospects. Like the rest of Asia, India too is
on the rise and is an important node in our overall
interest in India. With growth rates of between
7-8 per cent, a government committed to reform
and many good companies with the potential to
take on the world, India holds great promise and
is an economy we want to contribute to and participate
in.
We are beginning to see greater business opportunities
with the rise of the middle class and increasing
consumer sophistication. Sectors such as banking,
finance, telecom, healthcare and education are
expected to enjoy good growth prospects, as demands
for services rise parallel with India's greater
prosperity and spending power.
Temasek has also invested
in a couple of funds in India. Which are these
funds, and what is the role of these investments
in your strategy for India?
In addition to investing directly in companies,
Temasek is also continuously evaluating opportunities
to invest in funds with an India focus. In August
2003 it co-invested with Standard Chartered Bank
in the $100 million Merlion India Fund, which
aims to provide capital to promising small Indian
companies looking to expand in India and overseas.
It has also invested in WestBridge Capital, focusing
on early stage companies in the technology sector.
These investments are in keeping with Temasek's
philosophy of looking at emerging global leaders
from India, promising companies with a distinctive
intellectual property, world-class competitive
strengths and the potential to scale up beyond
their domestic market.
The Singapore government
also invests in India through arms like the Government
of Singapore Investment Corporation (GIC). How
would Temasek execute its own investment strategy
independent of GIC and funds like Merlion and
WestBridge?
Temasek Holdings is registered under the Companies
Act of Singapore. Our major investment decisions
are authorised by our board, which comprises a
majority of independent directors with extensive
commercial track record. Operating and other investment
decisions are responsibilities of our management
teams.
We make our investments strictly on commercial
merits. Our investments are not directed by the
Singapore government, and we also do not invest
jointly with the GIC that has a very different
mandate from Temasek Holdings. We are a long-term
shareholder and investor, while GIC operates as
a fund management company.
Merlion India Fund is just one of the funds with
an India focus that we are investing in as part
of our overall strategy in India. There is no
government participation in the Merlion India
Fund. It was started by Temasek Holdings and Standard
Chartared Private Equity. Currently, the fund
is actively managed by Standard Chartered Private
Equity.
As a strategic investor
with a longer investment horizon how would you
push through co-investment deals with other Pan-Asian
funds that are more exit driven over a shorter
horizon?
As far as possible we would seek like-minded co-investors.
We are open to co-investing with other funds active
in India and in the region. We are currently looking
at a couple of investment with some of the other
leading private equity investors. Finally, we
are also open to co-investing with other Indian
and non-Indian companies in opportunities that
could potentially provide us attractive returns.
Is there an upper and
lower limit on the equity stake you would pick
up in each investment?
No, there isn't a minimum or maximum cap on the
equity stake we choose to take. What is more important
to us is that we are able to invest in companies
with good potential, at the right price and time
and who see us as a partner for growth.
Temasek is not structured
as a typical private equity fund. How does this
benefit the fund's own operations and your investee
companies?
The fact that we are not structured as a fund
means that we can afford to take a long-term view
on investments as we do not need to divest our
holdings within a certain period of time. Our
investee companies tend to appreciate us as a
supportive, long-term shareholder since they recognise
that we are prepared to work with them to build
sustainable value and not just divest when the
going is bad.
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