In the middle of the pandemic in May, news dropped that PremjiInvest was a (small) investor in Moderna Inc., the American biotech that’s a frontrunner for making a Covid-19 vaccine. Aside from the eventual financial gains, the Moderna investment is symbolic of how far PremjiInvest has come since it was set up 15 years ago.
It may have missed investing in Facebook—as a co-investor with Microsoft when it invested $240 million—or in Alibaba, much before it went public in 2014. But it began cementing its position as a tech investor in the US and China post-2014, when regulatory fetters for overseas investment eased. “We did not do China as much as we’d have wished, but we did a few which were very successful and profitable. A lot of it was done through funds because accessing China is difficult for any Indian investor,” says a former senior executive who left recently.
At home, PremjiInvest is India’s largest single strategy private equity fund with at least $5 billion under management. Second on the totem pole, if you take the Singapore government-backed Temasek’s investments in India.
It may have started out as a family office, but PremjiInvest was never meant to be one. If anything, Azim Premji, the tech billionaire-turned-philanthropist, dislikes the term ‘family office’.
It was meant to be an institutional class endowment manager that would serve the Azim Premji Endowment Fund. “The dividend goes directly to the Azim Premji Foundation to spend and whatever is left comes to PremjiInvest to manage,” says the above executive. Premji, the 75-year-old patriarch, ensures that it’s done frugally. “He doesn’t like to waste money or time,” says BS Ajaikumar. Ajaikumar is the founder of Bengaluru-based HealthCare Global Enterprises Ltd, a cancer hospital chain that PremjiInvest exited in 2017. The Ken reached out to PremjiInvest but was unable to engage with the firm during the time this story was reported and published.
In 2006, when Premji picked 33-year-old tech research analyst Prakash Parthasarathy to be the fund’s Chief Investment Officer (CIO), the dos and don’ts were explicit. The inherited portfolio of Rs 1,200 crore ($163 million) comprised all listed equities, but the new mandate was to build a long-term portfolio.
One could do various asset classes in India, but Premji’s fiat was not to do anything too speculative. So putting money on a horse with no inkling of whether it would finish first or scratch—in other words, venture capital—was ruled out. There was a high premium on governance. So real estate—where government meddling is inevitable—was ruled out too.