Blackstone’s India PE Co-head Cyriac Quits to Start Own Venture
May buy controlling stake in Mumbai co Florintree Advisors
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.