Bain Capital has earmarked $7 billion to invest in India over the next three to five years as the country’s relatively steady politics and economic growth lift its attractiveness for overseas money managers.
The Boston-based firm also plans to increase its team of 25 private equity and special situations investment professionals by 15% to 20% over the next two or three years, according to Pavninder Singh, partner and a member of the Asian Pacific private equity team. Singh said that amount of capital would mark a substantial boost to the prior seven or eight years it took to deploy his firm’s first $7 billion in the country.
“India’s almost uncommon level of government stability is consistent with the right ingredients for strong and sustainable economic growth,” David Gross, partner and founding member of the firm’s Asia business, said in an interview in Mumbai.
Global firms from Canadian pensions to sovereign wealth funds in the Middle-East and Singapore are deploying billions of dollars in the world’s most populous nation, lured by the combination of strong economic growth and political stability. In India, Brookfield Asset Management has about $25 billion in assets under management across infrastructure, real estate and private equity, while Singapore’s Temasek Holdings Pte plans to commit as much as $10 billion there over the next three years.
Bain invests in the country from its private equity and special situations businesses, and through India Resurgence Fund, a partnership between Bain Capital Credit and Piramal Enterprises. The firm deployed roughly $2 billion across the three strategies in the last 18 months and distributed nearly $1.5 billion from its private equity business to investors last year, Singh said.
New Sector Opportunities
Bain has invested capital in the country across a range of sectors including IT services, financial services, pharmaceuticals and industrials. It’s making a concerted effort to grow its consumer retail business, which “plays to the theme of more consumer demand in India,” according to Singh.
“There is a lot more interest in India and people would like to see more exposure to India,” he said. “To do that, you need on the ground presence with experience,” something we’ve built over the past 15 years, he said.
Bain also sees tailwinds for manufacturing across sectors from model components to chemicals to pharmaceuticals as investments begin to shift to regions other than China, driven by the Indian government’s push on infrastructure, Singh said.
Prime Minister Narendra Modi’s administration has made a huge push into building infrastructure, with roads, highways and trains, and has pledged to invest about $120 billion in the financial year ending March 2024. Modi is in a strong position to extend his decade in power in upcoming elections.
The firm will also explore making investments in India from several of its global strategies in the next three to five years, including its global real estate, tech opportunities and life sciences funds, according to Gross. Better transport links have boosted the appetite for housing in smaller cities. Residential real estate demand reached a nine-year high in 2022, and the first half of 2023 followed a similar trend, according to a report by Knight Frank.
“Real estate may be the biggest opportunity and we have real estate investments from our special situations group so we have a lot of experience there,” Gross said.