Burmans to bet personal wealth in sunrise sectors

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Nov 21 2011, 07:17am hrs
The Burman family promoters of the R10,000-crore food and consumer goods group Dabur is charting an aggressive diversification strategy to channel family wealth into sunrise sectors. The strategy is simple: While the flagship firm Dabur would continue to be run by professionals, family members would keep investing personal wealth in newer businesses.

In fact, Daburs board has only four family members on it. The family has shortlisted three new growth segments for investments: Healthcare, education and expanding its current reach in financial services. It was the Burman family that had brought Aviva and Fidelity to India in the financial services sector through their private investments. Just last week, the family announced picking up a stake in Portuguese investment bank Espirito Santo with more such plans.

The funds for the investment would not be from the Dabur Group, but solely from the family and its private equity fund GTI Capital, Gaurav Burman, the youngest son of former Dabur chairman VC Burman and co-founder of GTI Capital, told FE in an interview.

GTI Capital is a PE fund that was set up by the Burmans for identifying new growth sectors. The family members put aside a part of their family wealth into powering these segments. This is the second PE fund run by the family after the London-listed Elephant Capital in which Gaurav Burman is a director.

Our overriding philosophy is anything to do with domestic consumption. We are an entrepreneurial family and we invest for the long term. One of the areas we will invest aggressively in is healthcare, especially on the services side. My cousin Anand (Burman) and I have invested in a diagnostic business called Diwan Chand. We view healthcare as a very important sector which has potential for massive growth, Gaurav Burman said. He said that the family was seriously looking at vocational training institutes apart from expanding in the financial services.

The proposed plan for the family does not end here. Less than a month after bringing in UKs niche sports car maker Caterham Cars into India, Gaurav Burman said that he is looking at taking motorsports to the next level in India by driving in other sports car makers. We are talking to other players at this stage, the 39-year-old devout motorsports fan said.

As a long-term motorsports strategy, he is weighing the options of entering the motorcycle and aviation space too under the umbrella of Caterham, but with a new name. The investment for the motorsport ventures would however be done by Gaurav and his elder sibling Mohit Burman in their personal capacity and would not include family funds.

We are chalking out long-term plans of whether there is an opportunity to manufacture specific accessories that go into personalising bikes or cars. Then possibly sell them outside India too. The plans are driven by passion for motorsports, he added.

This is not the first time the Burmans have entered the sports segment. Gaurav, along with Mohit, also holds a stake in Punjab Kings XI.

We have a small investment in aviation sector in a company called Air Works through my fund. We dont want to enter the commercial space. If we enter into aviation it would be for the single piston planes. All these plans would be under the umbrella of Caterham Cars which we may rebrand eventually. What we are looking at is the enthusiast space, he says.

Meanwhile the family has already invested Rs 350 crore through its other PE fund, Elephant Capital, in businesses such as Amar Chitra Katha, EIH, which owns the Oberoi group of Hotels, and Mahindra Forgings. The Elephant Capital is already invested therefore our new investments would be made through GTI Capital, he said. These PE funds invest money from both the family and its other investors.