Business News
Kishore Biyani is the most successful PE investor in 2013
MUMBAI: You know him as the entrepreneur who revolutionised retail in India. But did you know Future Group's Kishore Biyani is also the most successful private equity (PE) investor of 2013?
In the past 12 months, Biyani's listed investment vehicle Future Ventures - now rechristened Future Consumer Enterprise Limited - has clocked stellar returns through a series of multi-bagger disinvestments. Interestingly, out of the total Rs 250 crore invested across 12 ventures and JVs since its inception in 2007, just three exits alone have raked in Rs 550 crore - more than double the total money invested in all.
This is in sharp contrast when most peers including bulge-bracket global names are struggling to exit their portfolio companies from a similar vintage and return money to their investors. Even in the past two years, when Biyani's core retail empire was beset with high leverage and severe cash crunch, which eventually led to a significant pruning of flagship assets, the investment team at Future Ventures managed to deliver its mandate.
For example, in September, Future Group exited its six-year old investment in Biba - a women's ethnic wear company - netting over 5.5 times return on its investment. In 2007, it had pumped in Rs 10 crore in the venture and subsequently hiked its shareholding after buying out one of the two promoters for another Rs 32 crore. Two months later, the group divested its five-year old investment in AND Designs with a jaw-dropping exit multiple of 24x.
In 2008, Biyani partnered with designer Anita Dongre for her women's fashion line with a Rs 6-crore investment. The group wrapped up the third exit, cashing out of Capital Foods, a home-grown processed foods and consumer company for Rs 170 crore - a 3.2 times return on its investment value. The entire 44% stake was picked up by a European family office, Artal Investments, and its affiliate PE fund Invus for 170 crore.
What makes the performance stand out is a comparative study. Throughout the year, most funds, including the heavyweights, have managed only a modest 2-3 times return on their investments - the current industry average. Only an exceptional few, like TPG and Warburg Pincus, made bumper profits of over seven times in a few select trades like Shriram Transport or WNS - investments from an older vintage of 2002-05.
"Future Ventures is clearly the most prolific and successful fund in 2013. They have continued to remain focused on the consumer space which they understand the best and have managed to exit at the right time," says Sanjeev Krishnan, leader PE & transaction services, PwC.
What makes the performance stand out is a comparative study. Throughout the year, most funds, including the heavyweights, have managed only a modest 2-3 times return on their investments - the current industry average. Only an exceptional few, like TPG and Warburg Pincus, made bumper profits of over seven times in a few select trades like Shriram Transport or WNS - investments from an older vintage of 2002-05.