After weeks of intense rumours that Citi Venture Capital International’s India team has been signed on by private equity biggie TPG (earlier it was called Texas Pacific Group), it now appears that it may simply be setting up its own shop. The CVCI India team is headed by Citi veteran Ajay Relan and includes others such as P.R. Srinivasan and Vivek Chhachhi.When contacted by Business Today, Relan denied that there were any such plans. “There’s no truth in it,” was his short and hurried reply. Despite Relan’s denial, there’s no doubt that it’s a great time for a PE veteran like him to be setting up his own firm. Unlike three or four years ago, it is no longer impossible for individual fund managers to raise money from overseas investors on their own strength. Incidentally, one of Relan’s former team members, Sumeet Narang, went on to do just that after he graduated from Harvard Business School. This January, Narang’s Samara Capital finished raising its first fund of more than $250 million.
The original rumours of a churn at CVCI India came on the back of the subprime crisis in the US, and the resultant curb on the extended alternative investment opportunities being pursued by Citi. For example, it recently decided to shutter Citi Venture Capital that used to invest in mid-market companies based in the US. But the reason was that it had bought Metalmark Capital from Morgan Stanley in November last year, and the two businesses would have overlapped. Besides, TPG early last year hired Varun Kapur from Intel Capital to oversee TPG Ventures, a growth fund. (Puneet Bhatia, who heads TPG Capital, looks after large strategic transactions and buyouts in India.) TPG’s founding partner David Bonderman also denied the rumours, stating in an email reply to BT that “there is no truth to the issues you raised”.
Relan and his team stand to lose a lot of money (at least a few million dollars) in bonus from their investments, but, clearly, they are thinking big.