The folks at IDFC Private Equity celebrated their fifth birthday yesterday (March 5th) and a busy five years it has been. The coffee mug that they have been giving out as a memento carries the company logos of their portfolio of 23 investments. Four of these have been exited. Not a bad track record at all for a firm that started out as the country’s only infrastructure (excluding real estate) focused private equity investor. At the time, infrastructure had not emerged as the hot opportunity that it is today and folks were still wary about deals because of the highly unorganized nature of the business — it was not a simple matter (still is not) of investing in a company’s equity. You had to invest in a project, such as road or port, and for that you had to first create a special purpose vehicle in which to invest.Today, of course, investing in infrastructure is a must-do on everyone’s agenda. The sector has a small but fairly well established group of frontline players — GMR Group is a good example — who have corporatized themselves over the years. Investors such as 3i Group, Blackstone Group and Citi, among others, have recently announced aggressive plans for the space.
IDFC PE’s strategy has been to invest both in core infrastructure, ie. roads, ports and airports as well as ancillary infrastructure — logistics companies, construction, equipment makers and so on. In addition, amid much scepticism, the firm has also invested in hotels and amusement parks, which it also defines as infrastructure. The multi-pronged approach seems to have worked as a good hedging strategy so far. The firm is now in the middle of raising its third fund, which will have a corpus of $600 million. Read about its plans for the new fund here.
As for me, thanks to that coffee mug, I now have a ready reckoner to those 23 investments.
PS: The IDFC PE website opens funny. Maybe it is my browser but you may have problems viewing.
Photos: IDFC PE website
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