GIP establishes India platform with IDFC acquisition

The NY-based fund manager will acquire IDFC Alternatives’ infrastructure business, which will be rebranded as GIP India.

IDFC Alternatives’ infrastructure business will become GIP India following its sale to New York-based fund manager Global Infrastructure Partners, managing partner and chief executive of IDFC Alternatives, MK Sinha, told Infrastructure Investor.

The two firms did not disclose financial details of the transaction, which is pending regulatory approval, and Sinha declined to comment on this aspect of the deal.
IDFC Alternatives, a subsidiary of Bombay-listed financial institution IDFC Ltd, will continue to manage its private equity and real estate funds, according to a Bombay Stock Exchange filing.

However, “the intent is to sell all of IDFC Alternatives’ verticals over time”, Sinha said, referring to the firm’s real estate and private equity businesses.

Sinha, who between 2007 and 2012 served as president and chief executive of IDFC Project Equity, the subsidiary’s infrastructure business, was responsible for setting up and managing the firm’s infrastructure strategy. He will transition over to GIP India, he said, without providing further detail.

However, according to sources Infrastructure Investor spoke with, Sinha will co-head the new entity alongside a GIP-appointed counterpart, overseeing IDFC Alternatives’ infrastructure team of 17 investment professionals who will transition over to GIP India.

Asked whether GIP India would look to launch a new fund – which some sources said could target up to $2 billion, making it the largest infrastructure vehicle in the country to date – Sinha declined to comment, other than to say that “the timing and size of a fund is GIP’s prerogative”.

Founded in 2002, IDFC Alternatives is one of India’s largest alternatives fund managers with AUM of $3.4 billion, according to its website. It manages two infrastructure funds, India Infrastructure Fund I and II, with a combined $1.8 billion in commitments.

According to an investor presentation, IDFC has exited 11 of the 17 investments it made through Fund I, while Fund II currently has 15 investments across transportation, energy, utilities and logistics.

It is unclear whether GIP is funding the acquisition through its latest vehicle, GIP III, which it closed on $15.8 billion in January 2017. The firm has been busy deploying capital from the fund, including taking a leading role in the $5 billion acquisition of Equis Energy last October. More recently, it agreed to pay €1.98 billion for Italian high-speed rail operator Italo and $1.38 billion for NRG Energy’s US renewable energy business.

A spokesman for the firm declined to comment, citing legal and regulatory constraints.