Buyout funds short on talent to turn around assets

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Mumbai | Published: April 18, 2016 6:32:50 AM

Buyout funds and distressed assets players see a lot of action in India over the next few years but find themselves short of talent.

So scarce is expertise in this niche area of turning around a stressed asset that the larger players are roping in professionals and putting teams in place even before zeroing in on a target.So scarce is expertise in this niche area of turning around a stressed asset that the larger players are roping in professionals and putting teams in place even before zeroing in on a target.

Buyout funds and distressed assets players see a lot of action in India over the next few years but find themselves short of talent. So scarce is expertise in this niche area of turning around a stressed asset that the larger players are roping in professionals and putting teams in place even before zeroing in on a target.

Mahesh Singhi, founder and MD of Singhi Advisors, a Mumbai-based boutique advisory firm, points out that traditionally private equity players haven’t needed to scout for talent to run the companies they acquired. “PE funds typically picked up significant minority stakes and let the existing management run the show. Now that’s changing,” Singhi said.

The Piramal Group, which recently launched a Rs 6,000 crore distressed assets fund, has tied up with Nirmal Gangwal’s Brescon Corporate Advisors to acquire and run distressed assets. Meanwhile global turnaround management services firm Alvarez and Marsal is hoping to win some mandates. Sources add that the Big Four are also in the process of setting up an India practice to cater to buyout and distressed assets transactions. “ Private Equity funds looking to take over companies are signing up professionals as ‘entrepreneurs in waiting’’ says Vikram Utam Singh, Managing Director, Alvarez and Marsal India.

In some cases talent is in abundance: when Everstone Capital acquired the Modern bakery business from HUL last month,  former Cargill Foods India executive Aseem Soni was appointed as CEO immediately. The teaming up of AION Capital with former GE executives Pramod Bhasin and Ashok Chawla to acquire GE’s financial services business in India too didn’t pose any problems. However, finding the right person to turn around a steel company  in a challenging environment may not be easy. So although there are several targets — the sector has seen the maximum number of Strategic Debt Restructurings — there aren’t too many professionals to be hired.

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