Black­stone’s In­dia PE Co-head Cyr­iac Quits to Start Own Ven­ture

May buy con­trol­ling stake in Mum­bai co Flor­in­tree Ad­vi­sors

The Economic Times - - Companies & Economy -

In­du­lal PM & Baiju Kalesh

Mum­bai: The world’s big­gest al­ter­nate as­set man­ager Black­stone Group lost the co-head of its pri­vate eq­uity busi­ness in In­dia, Mathew Cyr­iac, who is leav­ing to launch his own firm, mark­ing the de­par­ture of one of the pil­lars of the New York-based fund’s In­dia op­er­a­tions.

Cyr­iac, se­nior man­ag­ing di­rec­tor and part­ner, de­cided to leave the firm af­ter more than a decade to launch a new fund and to be­come what could be called a ‘friendly ac­tivist in­vestor’ in In­dian pub­lic eq­ui­ties — a term new to In­dia but a prac­tice preva­lent in the de­vel­oped mar­kets such as the US.

“My ten­ure with Black­stone is both a pro­fes­sional pride for me and con­tin­u­ous learning ex­pe­ri­ence,’’ Cyr­iac said. ‘’Both the se­nior man­age­ment of the firm and the lead­er­ship of the PE busi­ness are in­tensely fo­cused on and en­gaged with the In­dia PE busi­ness. We have built an ex­cep­tional team in In­dia and I am very proud of what we have achieved as a team.”

‘”He is a tal­ented in­vestor who has played a role in sourc­ing and ex­e­cut­ing some of our most suc­cess­ful trans­ac­tions in the re­gion,’’ said Joe Baratta, Black­stone’s global head of pri­vate eq­uity. “All of us at Black­stone wish him well as he em­barks on his new­est pur­suit and look for­ward to con­tin­ued as­so­ci­a­tion and friend­ship. The In­dian team will now be led by our long-time part­ner, Amit Dixit, who heads our PE in­vest­ing across the re­gion.”

Cyr­iac in­tends to ac­quire ma­jor­ity con­trol in Flor­in­tree Ad­vi­sors, an al­ter­nate as­set man­age­ment firm based in Mum­bai. Lit­tle known Flor­in­tree is one of the best per­form­ing port­fo­lio man­agers in the coun­try.

Flor­in­tree is founded by his col­lege mate Chi­dambaram Pala­niap­pan, (no re­la­tion of for­mer In­dian fi­nance min­is­ter Pala­niap­pan Chi­dambaram), who is a for­mer fund man­ager from Martin Cur­rie In­vest­ment Man­age­ment in Ed­in­burgh. Flor­in­tree runs a deep value strat­egy fo­cused on cap­i­tal pro­tec­tion. Since its in­cep­tion in 2010, Flor­in­tree has out­per­formed the Nifty In­dex by 34% on an­nu­alised ba­sis at the end of Jan­uary 2017.

Cyr­iac is also con­sid­er­ing launch­ing a ‘la­tent value fund’, the first of its kind in In­dia, which would be a friendly ac­tivist in­vestor. The fund would iden­tify and in­vest in com­pa­nies in which sub­stan­tial value can be un­locked through one or more pre-iden­ti­fied in­ter­ven­tions in cor­po­rate gover­nance; strat­egy, cap­i­tal struc­ture and cap­i­tal al­lo­ca­tion be­sides low hang­ing op­er­a­tional im­prove­ments. KMad­ha­van, MD and erst­while share­holder of Malay­alam TV news sta­tion Asianet, is a large in­vestor in Flor­in­tree’s PMS and has dou­bled up now as an an­chor in­vestor af­ter Cyr­iac’s move.

“In­dia has a large num­ber of com­pa­nies that went pub­lic with­out req­ui­site prepa­ra­tion and ma­tu­rity. Flor­in­tree sees an op­por­tu­nity to build some of them into “real” pub­lic com­pa­nies through a ‘Friendly Ac­tivist’ ap­proach where one would ed­u­cate and nudge man­age­ments of tar­get com­pa­nies to un­der­take ac­tions they can eas­ily do,” Cyr­iac said.

Un­der Cyr­iac, Black­stone scored one of its best ex­its in a decade when it sold a con­trol­ling stake in cash man­age­ment com­pany CMS In­fos­ys­tem to Bar­ing Asia in 2015.

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