KKR India’s financial services unit ties up with Tranzmute Capital

Bengaluru: Private equity group KKR’s alternative credit business in India, KKR India Financial Services (KIFS), and business advisory firm Tranzmute Capital & Management have tied up to offer business management services to latent but high-potential businesses and turnaround services to stressed companies in India.

The two will primarily look at enhancing the business strategies, capital structures, and organisational and operational capabilities of mid-market companies. Other plans include helping companies achieve their growth ambitions by aligning economic incentives with the delivery of successful business outcomes.

The partnership will adopt an open architecture model servicing third-party businesses as well as select companies within KKR India Financial Services’ credit portfolio, KKR said in a statement on Thursday.

Narayan K. Seshadri, who co-founded Tranzmute Capital & Management, will assume the role of managing partner and will oversee the day-to-day activities of the partnership. Tranzmute’soperating management team will additionally be brought in to service companies, and experienced senior professionals will lead long-term transformational projects.

“Given the complexities of today’s operating environment—which include rapidly changing technologies and increasingly stringent regulations and customer demands—companies often require comprehensive transformational changes to grow and enhance their resilience.  This partnership enables us to expand our team, bring in highly talented, experienced professionals with entrepreneurial aspirations, and where possible, work with KIFS to extend innovative financing solutions to businesses,” Seshadri said in a statement.

KIFS and Seshadri expect to launch the partnership in the third quarter of 2018. Details were not disclosed.

“With Narayan and his team, we will have the ability to work with KIFS’ portfolio companies to better help them minimise risks and add measurable value.  Additionally, today’s market presents significant opportunities for business transformation, particularly as mid-market companies look to create robust business models and scale. This partnership is designed to help these companies on an open-architecture basis,” said B.V. Krishnan, member of KKR and chief executive of KIFS.

Over the past decade or so, KKR has invested over $8 billion in Indian companies—half of that in PE deals, and the rest in credit to more than 100 companies through its non-banking finance company.

This is one of the largest capital exposures by a global PE investor in India. More important, KKR has half a dozen PE portfolio exits under its belt and its returns from the country stand at over $3 billion. From its credit portfolio, it has exited from over 60 firms.