Business Today

Capital team

The firm that Rajan Jetley created a decade ago is no longer a one-man show, but has some of the savviest minds in private equity.

Shamni Pande | Print Edition: May 2, 2010

Blue-chip private sector jobs, entrepreneur, young star at two public sector giants and a multinational. All this in the '80s, before such things became a fad. So, what next? Rajan Jetley set the pace again, setting up private equity (PE) advisory firm Jacob Ballas Capital (JBC) with some partners and his connections. That was a decade ago.

Now 59, Jetley has pulled off another coup: Created a team at JBC that can do without his presence. Jetley now stays in the shadows, savouring the accolades that his team has been earning from peers, and the continued support that he gets from New York Life Investment Management, which globally manages over $200 billion.

But it was a different ball game in 2000, when JBC raised a proprietary fund, the New York Life International India Fund (Fund I), with $40 million. Then came Fund II, the New York Life Investment Management India Fund, with $127 million. For Jetley, the biggest milestone was 2008, when his team raised $440 million for Fund III despite the financial meltdown, and made some diverse investments with just 20 per cent of the funds.

Typical Jetley stuff, the caution and the diversified investments. Only, Jetley did not sweep the show in terms of closing deals. "I got all the deals in the first fund, but I will be lucky if I have 20 per cent involvement in the third fund. I believe that good companies are created through team effort and this happens only when you allow people to give their best," says Jetley, who has been chipping away to transform JBC and put in a structure and processes that will make it a well-oiled team.


FUND I/ $40 million proprietary (2000).

  • Invested in Bharti Airtel, Gujarat Pipavav, Thomson Press (part of the India Today Group).

FUND II/ $127 million, third-party (2005).

  • Invested in Punj Lloyd, Reliance Infrastructure, ABG Shipyard, Emaar MGF Land, Trianz Holdings, Bajaj Motors, Pipavav Shipyard, CEBBCO, Bhilwara Energy.

FUND III/ $440 million third party (2008).

  • 20% invested in Aster Teleservices, Mahindra Holidays & Resorts, Saravana Global Energy, Inventia Healthcare, Financial Software & Systems, SEW Infrastructure.


  • Five exits: Include Bharti Airtel, Thomson Press, Reliance Infrastructure.
  • Two listings of portfolio companies: Still remains invested in them.


Market observers say it has made a gain of roughly 3.5 times on invested capital in aggregate on exits.

Sample two investments. Recently, teaming up with New Enterprise Associates of the US, Fund III bought out the Carlyle Group's stake in Financial Software & Systems (FSS) and injected $30 million into the company, which is in the business of enabling electronic payments for banks through various modes. In March, JBC invested $34 million in the 50-year-old SEW Infrastructure, which is into engineering, procurement and construction (EPC) services, mostly in irrigation and hydroelectricity. "JBC's portfolio is fairly diversified and that comes as a surprise even to people like us who are in the know," says Brijesh Koshal, Managing Director (Investment Banking), Daiwa Capital Markets India.

The FSS deal was put together by JBC's current Managing Director, Srinivas Chidambaram, who was brought in by Jetley in 2005, just at the start of Fund II. The industry veteran was spotted by Jetley when he was with HSBC Private Equity (Asia) based out of Hong Kong and handling PE investments in India and South East Asia.

Thomas M. Haubenstricker, CEO, NYL Capital Partners, still recalls his first meeting with Jetley. "I first met Rajan in early 1999. At that time, he had already been advising New York Life on its potential entry into the Indian insurance market. He was also seeking investment opportunities on behalf of New York Life, and I met him during the due diligence on the Bharti (Airtel) investment," he says. But what has made the relationship prosper is the "personal integrity" and the "remarkable transformation" and professionalisation of the team.

Jetley has also been able to attract skilled investment professionals, and provided business development opportunities and the oversight that has resulted in strong returns and phenomenal growth in assets. "What is outstanding about JBC is their team and their ability to consistently take a good call on deals. I have worked with Sunil Chawla and the thought process is very good," says Jaya Sankar, Executive Director, Kotak Mahindra Capital.

At Commercial Engineers & Body Builders (CEBBCO), another company in which JBC has invested, CEO Ajay Gupta went to JBC because he knew Bharat Bakhshi, who had joined JBC as a partner. "My contact with Jacob Ballas began because of my association with Bharat...when I was looking for funds, I approached him for advice as I knew him as a family friend and he was at UBS (Investment Bank)...he then told me of his move to JBC," says Gupta.

CEBBCO is the leader in fabricating bodies for commercial vehicles made by Tata Motors and Ashok Leyland, as well as infantry vehicles and water bowsers. JBC helped CEBBCO get in touch with a partner when it wanted to make refrigerated trucks, and guided it through the strategic exercise. CEBBCO was in talks with at least 10 other PE funds, but its comfort with the JBC team won the day.

For Gupta, more than the funding what was important was the attitude at JBC. "I will always cherish that the team did not once push me for results.... we faced a terrible time in 2008 and even showed losses for a few months, but not once did anyone quiz me," he says. "I know of many friends who have taken PE support elsewhere and were hounded on various fronts." Such praise is not rare for the JBC team. Take Aster Teleservices, in which JBC invested last year. Aster serves the telecom and power sector.


  • In 1996, Jetley came back from Singapore, and set up Vickers Ballas India with Vickers Ballas Holdings of Singapore as an NBFC.
  • Vickers Ballas, then controlled by B.S. Ong, was taken over by DBS. The duo retained the India unit and renamed it Jacob Ballas.
  • Jetley brought New York Life and Max together in insurance.
  • In 2000, he wound up all other businesses to focus on PE.
"We have worked well in refining business strategy ...and in our preparations to eventually becoming a public company," says A. Srinivasa Prasad, Aster's CEO. So, how does the JBC team deal with stray whispers on the street? Stuff like: "Jetley's using his connections. You know he was part of Rajiv Gandhi's circle of new-age professional evangelists..."

The JBC team and Jetley brush aside such talk. Connections are known to open doors, offer opportunities and make fortunes for many in India. Jetley is no stranger to the term. "Building great relationships has been my strength and I believe in building strong teams," says Jetley. "So, what's wrong if I know how to nurture relationships? Don't people use every asset that they have when they start a business? I got in touch with people I knew, they required funds and I was in private equity—is that so unusual?" he retorts.

JBC has its supporters, who think connections can take you only so far. "Sure, Jetley is connected and that helps, but ...they have a good team in place," says Ajay Relan, Founder, CX Partners, a private equity firm. So, it's not surprising then that many others have chosen to participate in funding JBC: "It is very important for us to know the market as well as the fund that we are investing into. As India is still a nascent market... we look at the record of the fund's past investments and we find that JBC has tended to focus on market leaders in fast-growing segments and these companies are likely to command a premium when they exit," says K.V. Dhillon, Managing Director, Guggenheim Partners, which invests in other funds.

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