Infosys CEO SD Shibulal bets big on hospitality, realty

Written by Anand J | Bangalore | Updated: Mar 13 2014, 16:52pm hrs
Infosys SDShibulalInfosys co-founder SD Shibulal?s family office is currently building two hotel properties in Kodaikanal and Thiruvananthapuram.
Infosys co-founder and CEO SD Shibulals family office, a private limited company that manages his family wealth, is expanding its hospitality and real estate business further with investments worth Rs 130 crore. The family office, which manages around Rs 6,500 crore through various assets, including his family's holdings in Infosys, runs a resort in Coorg, Karnataka called The Tamara, a 56-room luxury property. The family office is registered with the registrar of companies as Innovations Investment Management India.

"We established this family office because we expect the wealth to grow for generations. The BMW family in Germany is into the seventh generation and we want to be something like that," said Senthil Kumar N, director and CEO of The Tamara.

The family is currently building two hotel properties, a 50-room luxury resort in Kodaikanal, a hill station in Tamil Nadu and a 108-room city hotel in Thiruvananthapuram, Kerala. While the Thiruvananthapuram property entails an investment of around R80 crore, Kodaikanal will need around R50 crore.

"We realised that we need to be proud of the properties we own. We want to do involvement management, not investment management," said Kumar, who joined Shibulals family office in 2005 after some of the family shares were sold at the American Depository Receipts issued by Infosys. An IIM-Bangalore and BITS-Pilani graduate, Kumar said the Coorg property, which started operations in April 2012, broke even in its seccond year.

"We are doing our own operations and marketing, and gaining experience in running the hospitality business, and we don't have any partnerships," said Kumar. According to him, the family believes in giving an experience rather than sight-seeing. For instance, the Kodaikanal property is a restoration of a 150-year-old building. "This gives us lots of stories to tell the guests and, today, people are willing to pay the premium."

He added, "You can't click photos of millions of honey bees buzzing when the coffee blossoms," he said, referring to the Tamara, which is built amid a 170-acre coffee plantation.

The family also owns nearly 900 acres of plantations of coffee and cardamom in Valparai, Tamil Nadu and Sakhleshpur, Karnataka. The company's other investments include a 50% stake in Avant Garde Hospitality, which runs fine-dining restaurants Caperberry and Fava in Bangalore.

The company's other key portfolio is apartment properties in the US and Germany. In the US, we manage 800 apartments in the Seattle area, which houses US multinationals like Microsoft, Amazon and Starbucks. The family has two apartment complexes of 20-25 units in Berlin and Frankfurt.

"We have a bias towards real estate. We believe it has the highest potential to cover you against inflation. You cant make money in a steady way from portfolios when you are managing thousands of crores unless you are a Warren Buffet!" said Kumar.