Trikona Capital Ltd., the leading fund management firm for institutional investment in Indian infrastructure and real estate, is continuing a standing relationship with SachsenFonds Holding GmbH. The German fund will look, along with its partner, to invest $70 million into Indian infrastructure, divesting the rest of the $156 million into asset portfolios of Trikona's.
“We are very pleased to have successfully completed the third stage of our portfolio sales to SachsenFonds,” says Aashish Kalra, co-founder and managing director of Trikona, in a statement. “Our most significant deal with Sachsen to date, this agreement further illustrates the strength of our relationship, as well as our robust business model.”
The German-based fund previously partnered with the firm for two other transactions, starting in December of 2007. Sachsen purchased assets from the Trikona Trinity Capital PLC portfolio for $65 million, as well as partnering again for a $150-million-deal in June of 2008. The June 2008 deal will partially fund a co-investment with Trikona of $40 million to Mumbai, India to refurbish four acres of middle-class housing and build high-end luxury homes as part of Trikona's urban rejuvenation platform. Sachsen is contributing 55% of the investment cost.
“One of our biggest projects is urban rejuvenation in Mumbai,” Aashish Kalra, managing director of Trikona tells Globest.com. “If you went to America and you didn't invest in New York or you went to the United Kingdom and you didn't invest in London, that's like coming to India and not investing in Mumbai. Because [Mumbai] is an island city, you have to rejuvenate the existing infrastructure.” The middle-income cooperative housing that was built in the 1970s was capped off at two buildings, Kalra explains, whereas today, six buildings are allowed. “So, instead of [people] living in two, you say, 'you can live in four and the extra two is what we'll sell to the market',” he says. “And that's what that transaction was all about.”
The current deal will co-invest, with Trikona, roughly $70 million into four infrastructure projects that are in development in India, each within asset portfolios from Trikona; Sankalp Buildwell Private Ltd.; Jodhana Developers Private Ltd.; Enigma Constructions Private Ltd.; and Horizon Countrywide Logistics Ltd. The rest of the money, $86 million, will be divested into other Trikona portfolios, following a similar structure of previous deals.
Trikona stresses that the partnership with SachsenFonds is far from over and future deals are already being worked out, although undisclosed at this time. In India, illiquid partnerships cannot be sold for three years to someone, Kalra says. “That's the government's law,” he points out. Emphasizing their rare ability to sell assets under these laws, Kalra explains, “it is predicated on the fact that we have allowed our partner to build another business, a mutual fund business on this,” he says. “We believe [SachsenFonds] can repackage Indian risk and repackage it in Germany.”
Trikona is a multi-national firm with offices in New York, London, Delhi, India and Mumbai, India. According to Trikona, they have made $250 million on a cash-on-cash basis and generated in excess of 120% return.
Source: Globe St