How Blackstone turned India into its most profitable market
Blackstone Group LP says it’s found the formula for making money in India, which has become its top-performing market globally after the firm began focusing on bigger buyout deals.
Over the past few years, Blackstone has started concentrating on select sectors like consumer and information technology where it expects India to see the most wealth creation, according to senior managing director Amit Dixit. That shift, along with a preference for larger investment sizes, helped it generate returns as high as six times on recent exits in the country, a person with knowledge of the matter said.
Blackstone recorded an annualised internal rate of return of about 30% on its India private equity investments since 2011, the highest among its markets worldwide, according to the person. It booked about 25% returns in China during the period, the
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person said, asking not to be identified. India-focused funds of all vintages have seen median returns of 12.4%, according to Preqin Ltd.
“Limited partners always used to complain that it’s easy to invest in India and hard to get the money out,” Dixit said in an interview at Blackstone’s office in Mumbai. “That has changed now — since 2014, there has been a good exit environment.”
Dixit declined to comment on the fund’s returns, citing confidentiality agreements.
Blackstone, which earlier bought minority stakes in India, has decided it won’t be a passive investor, according to Dixit. Its strategy since 2011 has been to acquire majority stakes in Indian companies only in certain areas where it has “deep knowledge” like finance, healthcare and industrials, he said.