- Several large global investors like CPPIB and Partners Group are opting to make direct investments in Indian companies instead of investing through private equity funds due to disappointing returns from PE investments in India. They are hiring senior executives to source and manage direct deals. - Punj Lloyd's subsidiary Sembawang Engineers made a $26.2 million counter offer to acquire Macmahon's construction business, which was previously being acquired by Leighton Holdings. - Geometric acquired 3Cap Technologies GmbH for $14.5 million. 3Cap is a German electronics engineering firm and Geometric offers engineering software and services.

1. PE Round Up Report
CP-Artha Financial Advisory Pvt Ltd. 1/7/2013 Edition: 46
PE Sector News M& A Deal – I

Global investors skip PE route to go solo in Punj Lloyd arm makes $26.2M
India
counter offer to buy construction
Miffed with disappointing returns from private equity investments
business of Australia’s Macmahon
in India, institutional investors in these funds are now opting to go
solo. Leading investors in private equity funds, otherwise known Sembawang Engineers and
as limited partners (LPs), such as Canada Pension Plan Investment Constructors Pte Ltd (Sembawang), a
Board (CPPIB), the UK government-owned CDC Group and Singapore-based subsidiary of
Switzerland-based Partners Group, have hired senior fund construction firm Punj Lloyd Ltd, has
managers to invest their money directly in Indian companies made an offer to ASX-listed Macmahon
Holdings Ltd for buying its construction
The move will help the LPs save the fee they pay private equity
business. This comes as a counter offer
firms and play an active role in these investments. Partners
to the proposed takeover of the asset
Group, which manages funds worth $33 billion worldwide, has
by Leighton Holdings Ltd, a large
roped in Cyrus Driver to strengthen direct investment activities in
minority shareholder of the Australian
India
stock exchange-listed contract mining
CPPIB, which handles assets worth $170 billion worldwide, has
and construction company, Macmahon
appointed Vikram Gandhi, a former New York-based Credit Suisse
executive, as an advisor to find direct deal opportunities in India. Sembawang has presence in Malaysia,
Earlier, CPPIB had made a $100-million commitment to Multiples Indonesia, HongKong, China, India,
Asset Advisors, a fund owned by Renuka Ramnath UAE, Bahrain and Australia
CDC has appointed Srinivasan Nagarajan, a director at Actis, as the Punj Lloyd Ltd is an infrastructure firm
regional director and Rohit Anand from IDFC Private Equity as an providing engineering, procurement,
investment executive to manage their Indian investments. and construction services with around
CDC spokesperson said: In India, we recognise that the business $2 billion in annual revenues but thin
community and the infrastructure sector require capital in margins. The firm counts amongst its
different forms and so we are now providing capital through direct investors Warburg, which held 4.46 per
debt and equity cent stake in the firm

2. Private equity funds in India charge a two per cent fee and 20 per
cent carry (carried interest or return) on funds they raise from M& A Deal - II
investors. These fund managers (GPs, or general partners) have

been facing the wrath of global investors, as a majority of them
have seen 'zero return' on investments made in India since 2003
Geometric acquires 3Cap
Technologies GmbH for $14.5M
The lack of exits by fund managers in India has encouraged certain
limited partners to take a more active role in their investments and
look for returns outside of traditional fund investments. LPs seek
Mumbai-based software services and
to make direct investments in order to lower the costs associated
consulting company Geometric Limited
with fund investments, as they often don't have to pay any
has announced that its German
incremental management fee to the fund, and to benefit from high
subsidiary, Geometric Europe GmbH,
returns
has acquired Munich-based electronics
engineering firm 3Cap Technologies
PE Recent Deal
GmbH for € 11 million ($14.5 million)
Ashmore Alchemy invests $8.2M in Pharma firm
Zim Labs Incorporated in 1994, Geometric offers
The private equity fund managed by Ashmore Alchemy India services in engineering software and
Advisors has invested $8.2 million (Rs 45 crore) in pharmaceutical mechanical engineering. Its portfolio
firm Zim Laboratories Ltd for a minority stake includes product lifecycle
management, global engineering
The investment was concluded in October and has been made
services and offshore product
through AA Development Capital India Fund 1 LLC, an $80 million
development solutions and
fund which was a joint venture between Alchemy Partners LLP and
technologies. Almost 70 per cent of its
Ashmore Investments (UK)
revenues come from US market
A 25-year-old firm founded by technocrat entrepreneurs, Zim is
3Cap was founded 2004 by Henri
one of the largest novel drug delivery systems-focused generic
Sadoune, a French national based out
pharmaceutical player in India. It has an in-house research and
of Munich. Sadoune has entered into
development capabilities enabling it to deliver pharmaceutical
a long term agreement with Geometric
formulations at reasonable cost. A third of Zim's income comes
and will take responsibility for all
from exports to over 25 countries. The company also has strong
embedded systems activities, including
presence in government institution business in India
Geometric’s existing embedded
Private equity interest in the pharmaceuticals and life sciences systems projects
sector has seen an uptick recently. In 2012, there were 14 deals in

3. the sector worth $179 million as compared to eight deals worth $116 million, according to VCCEdge
Chrono watch to raise VC investment
Chrono Watch Company, an 'affordable to accessible luxury' watch distribution, retailing and e-tailing company is
planning to rise R10 Cr in Series A funding from venture capitalists. Chrono Watch Company is the brainchild of
Arjun Sekhri, a Hong Kong based serial entrepreneur, investor and innovator in the F&B, Retail, Consumer Branding
& E-Commerce sectors in India
Incorporated in June 2011, Chrono Watch commenced operation recently in January. It will be introducing and
officially launching 45 international watch brands in India, which are currently not available in the country. The
company's featured watch brands are mostly from Switzerland, Germany, Italy, France and USA. Under the sports
category, it sell brands like Alessandro Baldieri, Alpina, Archimede and Aviator, while under the classic line, it has
brands like Autran & Viala and Epos Swiss. Under the fashion category, it sells brands like Alfex, Azimuth and
Bavarian Crono
The e-commerce site of the venture will be up and running by the second week of February and will retail about
1,500 different watch models, as stated by Deccan Herald
Unitus seed fund raises investment for BoP startups
Unitus Seed Fund has secured over $8 Mn in investment commitments for its seed-stage venture capital fund
focused on accelerating "BoP startups" - startups serving low-income consumers in India. USF invests in for-profit
scalable companies that will provide economic self-reliance, education, and basic necessities to millions of low-
income people living at the base of the economic pyramid. Unitus Seed Fund is a project of Unitus Labs and is
currently focused on the India market
USF identifies startups with strong entrepreneurial teams who have a mission to build large sustainable businesses
which improve the lives of those living at the base of the economic pyramid (income of less than $4 per day). One
of USF's first investments, Hippocampus Learning Centers, has expanded its rural education centers and has
recently received a substantial follow-on growth capital infusion
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Private Equity (PE) Research team
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