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Second Careers Abound As IPO & Buyout Activity Takes Root
Setting up a bespoke investment firm or family office is becoming common as the flexibility these bring in outweighs the constraints that come with managing third party capital.
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The frenetic M&A activity has given rise to an interesting reorientation of entrepreneur & professional goals. As new shareholders & management takeover a company, the original entrepreneurs & key managers end up transitioning out after a period of time. While this is an essential part & parcel of M&A, the burgeoning activity in India & across Asia has meant that buyouts are happening in India & across Asia at a never before frequency. And that has meant that while some of the leaders in these companies do find space within the organization, there is a growing number of those who create a second coming of sorts for themselves. This is especially true of companies where ownership has passed to th hands of buyout funds, or where through continuous dilutions over multiple rounds, the founders and core management team are left with sparse equity & little or no management control.
A key example of this in the consumer tech space is Flipkart, where both founders Sachin Bansal & Binny Bansal – unrelated to each other – have embarked on new ventures. Sachin has started off a new innings as the founder of Navi Capital, a venture focused on simplifying financial services using technology, whereas Binny has setup O21, an early stage fund in Singapore. Erstwhile media moghul Ronnie Screwvala, who is a now a known serial entrepreneur after moving on from UTV, has been making splash in edutech space via his investment arm Unilazer Ventures. Uday Shankar, the former Star India CEO, after executing the merger with Disney and successfully transitioning operations has stepped down and announced a new venture with James Murdoch focusing on digital media opportunities.
Financial services is another hotbed of new innings, especially on account of high turnover rates at the senior levels, which remains somewhat of a bane for the industry. Aditya Puri, has setup his family office - Salisbury Investments – and is already in the news for making a small bet on PNB Housing. Bhupinder Singh founded Incred after high long stint with Deutsche Bank. Jaspal Bindra re-energized Centrum after retiring from Standard Chartered Bank and now is eyeing transformation to a bank, as he simultaneously executes the rescue takeover of PMC Bank. So is the case with Shachindra Nath, the former CEO of Religare Financial Services, who after a successful career has now launched started UGRO - an NBFC that focuses on a granular SME enhanced digital lending model, and has already seen backing by marquee investors such as PAG, NewQuest and ADV.
Successful fund managers also have started seeing opportunities in a familiar space – manage money or investments of accumulated capital for key clients. The choice they are making is between working for a large platform with greater financial strength or lauch a new one with lesser money but higher flexibility and a more focused investment approach. Kishore Moorjani left after nine years Blackstone GSO– while his next move is yet to be known but it would not come as a surprise if he walks down the entrepreneurship path. Nitish Agarwal led the management buyout of the credit arm of Olympus Capital with the backing of OMERS and rebranded it Orion Capital Asia. Orion operates as a private debt platform focused on mid corporates in Asia. Ashish Gupta, after a long stint with Farallon Capital, has gone on to associate with SPACs and other permanent capital ventures. Kristal.ai is the new venture setup by Asheesh Chanda after a long stint with JP Morgan and KrisCapital.
Setting up a bespoke investment firm or family office is becoming common as the flexibility these bring in outweighs the constraints that come with managing third party capital. Singapore has seen a significant increase in the number of such outfits due to favourable jurisdiction and better management of COVID making it a safe haven for families. It is a trend that is worth watching out for as more and more startups seek IPOs & buyouts. An increasing number of such professionals with their experience and capital have the capability to make a positive impact on the startup ecosystem as well as an overall positive social impact through the encouragement of a second generation of entrepreneurs as well professionals in realizing their dreams. With many such second innings on the anvil, there are interesting times that lay ahead.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.