Morgan Stanley has signalled its plans to focus more on private equity investing in India by hiring industry veteran, Alluri Srinivasa Rao. Rao announced earlier in April that he was leaving ICICI Venture but did not confirm where he was going. Meanwhile, ICICI Venture, India's largest domestic private equity player, is not dwelling on Rao's departure, having added a few veterans of its own to its ranks.
Morgan Stanley has poached an experienced professional in the private equity field. Rao has played a leading role at ICICI Venture since 2002. The private equity firm is a subsidiary of India's ICICI Bank and has assets worth $1.5 billion. Rao came to ICICI Venture from industry and had significant experience working in large Indian pharmaceuticals companies. Indeed, his understanding of the healthcare industry is reported to have contributed to ICICI Venture’s ability to raise healthcare dedicated money.
Morgan Stanley has hired Rao, who joins the US investment bank on May 1, to spearhead its plans to become a more active player in the market. In October 2007 Morgan Stanley Private Equity Asia closed a $1.5 billion Asia fund, its third fund for investing in the region. At the time the firm noted that the new corpus was intended to be deployed in China, South Korea, Singapore and Taiwan, where it has been an active player for the last 15 years, but also to enhance focus on markets such as India, Japan and Australia where activity hitherto had been limited.
Morgan Stanley has not yet made any private equity investments in India so all eyes will be on Rao to see how he builds this business. India is already a very competitive market for financial sponsors. Firms like Blackstone have been forced by market realities in India to lower their minimum investment size and/or target holdings and thus will be competing on the same turf as Morgan Stanley.
But Morgan Stanley real estate investing has managed to close investments in Alpha:G Corp, Oberoi Constructions and Mantri Developers over the last two years in an equally crowded arena and the firm must be hoping that it can also be successful on the private equity front.
Meanwhile, ICICI Venture has been successful in bringing some veterans of its own back to the fold. FinanceAsia earlier reported that Jayanta Banerjee had decided to move back to ICICI Venture after spending less than six months heading the private equity investing business for Lehman Brothers in India. Banerjee has over 17 years of industry experience in private equity and investment banking and has played multiple roles at ICICI group where he has spent over a decade.
Banerjee came back to ICICI Venture as a member of the management team, responsible for corporate and strategic initiatives, including maintaining ICICI Venture's industry presence, strategy and timing of new funds and investor relations.
Earlier this year ICICI Venture managed to lure KS Jangbahadur back from the US where he was a managing director with JPMorgan in San Francisco responsible for the global software investment banking practice. Jangbahadur had been on the sell-side for 14 years and his career spans roles at ICICI Securities, UBS and Credit Suisse. Jangbahadur returns to Mumbai after spending time working in Singapore, Hong Kong and San Francisco.
At ICICI Venture Jangbahadur looks at international investments and develops strategies and partnerships to scale up ICICI Venture’s investments in overseas markets.