IDFC Alternatives, the private equity arm of IDFC Ltd, is on sale.

On 28 April, finance company IDFC Ltd announced on the stock exchanges that it had sold its infrastructure-focused fund to US-based private equity fund Global Infrastructure Partners India (GIP) for an undisclosed sum. With this deal, IDFC has sold off the oldest Indian infrastructure fund in the country which had, so far, deployed $1.8 billion. And it won’t be long before multi-asset manager IDFC Alternatives is completely disposed of as well.

That’s not all. The general private equity fund and the real estate fund are also under sale and should be concluded in the next few months. As of today, IDFC Alternatives has assets under management (AUM) of $3.6 billion across its various funds. “The general PE fund and RE fund are in the midst of a transaction with Investcorp which would be closed in the next three to four months; it is undergoing regulatory processes,” says a person familiar with the matter who is not authorised to speak to the media. Investcorp is a Bahrain-headquartered private equity fund.

With this deal, MK Sinha, who headed the overall business as managing director and chief executive officer of IDFC Alternatives, will lead the infrastructure piece at the GIP office. The respective heads of the existing funds will also move on to the new fund house.

IDFC Ltd and GIP declined to respond to a detailed questionnaire sent via email. Investcorp is yet to respond to email queries sent to the company on 18 July.

Both these deals are a gateway for GIP and Investcorp to enter the Indian market where they do not have any standalone presence. Safe to say, India continues to be an attractive market for foreign investors.

Apart from the sale of these funds, IDFC Alternatives has recently concluded a secondary deal. Its existing investor, CDC Group Plc, the development finance institution owned by the UK government, has bought out some of the limited partners in the fund at a discounted value, says the first person mentioned above. Limited Partners or LPs are investors in a private equity fund. In an emailed response, CDC confirmed the buyouts but declined to provide any further details due to confidentiality agreements.

This is obviously not a happy outcome.

For over a year, employees of IDFC Alternatives have seen this coming. The sale processes, according to the individual mentioned above, were initiated last year when IDFC decided to refocus its energies on banking. But the reason isn’t IDFC Bank alone. Over the last few years, the capital-raising activity of the fund had also slowed down. Anyone in the funds business knows how important it is to keep raising and deploying capital at a rapid pace.  

According to Bain & Co, in 2015-2016, over 491 private equity funds had invested in India as compared to 474 funds between 2014-2016.

AUTHOR

Pooja Sarkar

Pooja has been a journalist for about a decade now. She has worked at DNA Money, Business Standard and Mint. In her last assignment, Pooja was a chief correspondent at ET Now. At The Ken, she will write on private equity and the venture capital ecosystem. This, in the context of company strategy. Along with work, she is picking up important life skills these days, like the art of knitting a muffler.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?

MOST POPULAR

Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750

Subscribe
 

Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500

Subscribe
MOST POPULAR

Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120

Subscribe
 

Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

$ 20

Subscribe

Questions?

What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at [email protected] detailing the error or queries.