JM Financial launches India-focused private equity fund with Old Lane

JM Financial launches private equity fund with Old Lane Partners LP as lead investor and co-sponsor and initial corpus of $150-175 million.
JM Financial informed the Bombay Stock Exchange (BSE) on August 9 that it has launched a private equity fund with Old Lane Partners LP as lead investor and co-sponsor. The fund is called JM Financial India Fund. The initial corpus of the fund is $150-175 million, being raised both from investors in India and outside the country. JM Financial India Fund announced its first financial close on July 31 with commitments of $90 million.

Nimesh Kampani, Chairman, JM Financial Group said, "We are pleased to announce the setting up of our corporate private equity fund. This is in line with the expansion plans for the group. This fund is JM Financial Group's first private equity fund and we are pleased to have Old Lane as our lead investor. The Indian private equity market is at the threshold of its most exciting phase. The India growth story, strong emerging companies backed by new age entrepreneurs offers tremendous opportunity for the JM Financial Group to invest private equity capital in building businesses in such high growth companies."

Old Lane is a New York-based hedge fund founded earlier this year by three senior ex-Morgan Stanley executives, Vikram Pandit, John Havens and Guru Ramakrishnan. Pandit was the head of institutional securities at Morgan Stanley and Havens was the head of equities. Ramakrishnan was the head of trading, technology and new products in the equities group. All three left Morgan Stanley in March, 2005, reportedly after differences of opinion with former Morgan Stanley chairman, Philip Purcell.

JM Financial is listed on the BSE. Its promoters own 51% of the company as per the companyÆs most recent BSE filing. In May this year JM Financial increased its share capital through preferential allotments to Wipro chairman and managing director, Azim Premji and New York-based investment firms, Blue Ridge Partnership/Blue Ridge Offshore Master Ltd. Partnership.

In 2005 Kampani merged JM Securities, his private holding company into JM Financial announcing that going forward JM Financial would be the vehicle through which the group would foray into new businesses. This led to speculation that he could be contemplating setting up a bank like rival, Uday Kotak. Speculation has also been rife about the future of his investment banking joint venture, JM Morgan Stanley. Rumour mills have worked overtime since Hemendra Kothari sold a controlling interest in investment bank DSP Merrill Lynch to Merrill Lynch in December last year.

The news about the private equity fund seemed to have already filtered through to investors as the stock has been moving up over the last few days. In a firm Mumbai market, which touched a level of 11,145 for the first time since May 18, the share price of JM Financial reacted further positively to the formal announcement, moving up more then 5% to Rs737 ($16.02) before closing at Rs726, up 4.6%.
¬ Haymarket Media Limited. All rights reserved.
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