Thomas Weisel Exits India Fund of Funds Biz

Jul 28 2008 | 10:10am ET

(Source: VC Circle) -- U.S.-based asset management company Guggenheim Partners has acquired control of the India fund of funds business of Thomas Weisel Partners.  

While the two buyout entities will jointly manage the existing fund—Thomas Weisel Partners India Opportunity Fund—Thomas Weisel Partners is exiting its India operations, save the existing fund.

The private equity fund is currently less than $100 million, and sources say it is likely the fund will be expanded by another $100 million. However, all the new products to be launched in the future will be fully controlled by Guggenheim.

The ownership of the fund will be determined on the basis of the capital brought in by each entity. Thomas Weisel Partners will own stake in the fund corresponding to the existing assets, while Guggenheim’s stake will be determined on the basis of how much it brings in at the expansion stage.

As part of the deal, all the existing employees of Thomas Weisel Partners in Mumbai—led by KV Dhillion (India Head) and Anand Sunderji (Head of Private Equity)—will be moving to Guggenheim. Sources also say that Guggenheim is likely to hire more staff in Dubai and Hong Kong, where it has significant operations, and in Mumbai new products are launched.

Guggenheim is one of the largest funds in the world with assets under management worth $125 billion.

Guggenheim is not entirely new to India. The private equity firm has made three investments in the infrastructure space such as India Hydropower Development Company, Vikram Logistics & Maritime Services and IRMC.

Thomas Weisel’s India Opportunities Fund has recently been on the road to raise a targeted sum of $200 million for its fund of funds business. Thomas Weisel’s move could not have come at a more appropriate time as fund raising is getting tougher in the wake of a global slowdown and a looming credit crisis.

Forty percent of the existing Thomas Weisel India Opportunities Fund has been invested, sources say. This includes $15 million in IDFC Private Equity and $10 million in iLabs Group.

Thomas Weisel also had a 25-member research team in India, which was wound up after its head, Praveen Chakravarty, moved to BNP Paribas Securities India as COO and head of research late last year.

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