The Blackstone Group, one of the largest private equity groups globally, is exiting its biggest India-focused close-ended mutual fund scheme: India Fund Inc. The company will transfer the management of the fund to Aberdeen Asset Management Asia. The deal awaits stockholders’ approval on November 16. Another scheme, the Asia Tigers Fund of $60 million, is also being sold to Aberdeen. Besides the change in management, the deal size was not disclosed.
India Fund Inc manages $1.22 billion and is managed by senior managing director Punita Kumar-Sinha since 1997 when it was under Oppenheimer. With the closure of the deal, Sinha will also exit Blackstone. “After managing the fund successfully for 15 years, I am content to exit, along with Blackstone. The time is right for me to pursue other opportunities,” said Sinha.
She said several other options were explored, including a new structure where Sinha, other senior managers and Blackstone would be investors. “But we chose not to pursue this option. I have been involved in this process from the start,” added Sinha.
Announcing this deal, as a part of the overall strategy to exit the Asia-focused asset management business, the statement by Blackstone on its website says: “If the Fund’s stockholders approve the new management agreement, Aberdeen Asset Management Asia, based in Singapore and a subsidiary of Aberdeen Asset Management Plc, will be the Fund’s investment manager and will assume responsibility for the design and implementation of the Fund’s investment programme.”
“This was the only part of the Blackstone Group that was managing publicly listed close- ended investment companies focused on Asian equity markets,” said Sinha. Besides her, there were eight others managing this fund — two in Mumbai and the rest in Boston. Blackstone is exiting from India Fund as a part of its decision to focus on its private equity business and its real estate investments in India. In 2008, Blackstone had exited single-manager hedge funds as a part of its derisking strategy.
Blackstone’s India Fund is focused on large-cap stocks and relied on interactions with managements to invest in companies. Nearly 95 per cent of the fund’s corpus has been invested in blue-chip companies.
This fund's investment objective is long-term capital appreciation by investing primarily in the equity securities of Indian companies.
The fund, since 1997, has returned 14.88 per cent annually. In the last decade, it has returned 20.24 per cent annually. In the last one year, the fund has returned 7.62 per cent.
The Blackstone Group currently also has $1.7 billion in private equity investments in India and $800 million in real estate. Sources claimed Blackstone was committed to growing these businesses in India.
Source: Business Standard