Religare Enterprises has acquired 65% in Northgate. Northgate is a private equity and VC investment manager with $3bn in AUM. Deal size is around $200mn according to ET.

The deal is part of Religare’s plan to acquire asset management companies globally through a US based holding company, and then list the holding company after getting its AUM to $100bn.

Northgate is a fund of funds founded by 3 former NFL players, Mark Harris, Brent Jones and Thomas Vardell. Hosein Khajeh-Hosseiny and Jared Stone are former McKinsey-ites. This team will continue to run the operations of the company post acquisition, and own significant equity interests in the company while maintaining their general partner status in private equity and venture capital funds currently active.

Jefferies & Co and Religare Capital Markets were the financial advisors to Religare Enterprises and Credit Suisse Securities was the financial advisor to Northgate. Paul, Weiss, Rifkind, Wharton & Garrison acted as transaction counsel to Religare Enterprises, while Shearman & Sterling were the counsels for Northgate.

Religare has an outlined plan to have a global presence and has allocated $1 billion (Rs 4,600 crore) for strategic investments globally. It plans to become a large financial MNC on the lines of the erstwhile American I-banks. It is trying to gain size through acquisitions. It has gained a significant presence in London through its acquisition Hichens Harrison for $110 million. Now it needs an investment banking presence in New York. It might also be looking for acquisitions in the Asia-Pacific regions - Singapore and Hong Kong.

Recently, it lost out on AIG’s asset management arm which manages about $100 billion worth of client funds to Hong Kong-based billionaire Richard Li’s Pacific Century. Religare now plans to tap smaller, niche firms.

It acquired Lotus AMC, which managed over Rs 5,000 crore in mutual funds.

Transaction Reference: ET

Dr. Sunil Godwani, CEO, mentioned in an interview with Business Standard that its core focus areas in the global market are going to be Asset Management and Investment Banking.
The article covers how the company intends to become a large global financial player.
– Business Standard Article.

It has engaged McKinsey to develop an emerging market investment bank. So far its investment banking arm, Religare Capital Markets, has only involved in deals involving the promoters entities, like the Ranbaxy-Daiichi Sankyo acquisition and the Fortis’ acquisition of Wochardt’s 10 Hospitals. In London, Huchins Harrison acquisition came with investment banking licenses for London, Johannesburg and West Asia. They have also applied for a US investment banking license as well. In Asia, they have a Huchins Harrison office in Singapore and a direct presence in Malaysia, Dubai, Qatar and Indonesia.
In the asset management business, Religare wants to take the fund of funds route.

The article mentions that “Religare has acquired the management team of Evolvence, an India-focused fund of funds with a corpus of $250 million. It has done something similar in Japan — it has bought the team and asset-management contract of a European asset management company.”

This deal is an extension of the Fund of Fund strategy.

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KVEZAR VIEW

  DEAL TRACKER FOR

Date	Transaction	Type	Buyer	Size ($mn)
23/02/10	Northgate - Religare Enterprises	M&A	Religare Enterprises Limited	200.00

 

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08/05/12	M&A	HCL Group	DLF Pramerica Life Insurance Company Limited	-	Planned
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  Profiles

Fund
Name	Corpus	Target Sector	Website	KeyContact
Northgate LLC		Sector Agnostic	www.northgate.com	Mark HarrisBrend JonesThomas VardellHosein Khajeh-HosseinyJared StoneBrent Jones

Company
Name	Promoters	Office	Competitor	Website
Religare Enterprises Limited	Malvinder Mohan Singh Shivinder Mohan Singh	D3, P3B, District Centre, Saket	Motilal Oswal Financial Services Limited Kotak Securities Limited India Infoline Limited Reliance Capital Indiabulls Securities Limited	www.religare.in

  Advisor

	Jefferies India Private Limited
	Credit Suisse Group (I-Bank)