Carlyle invests in Indian brokerage

The US firm has bolstered its FIG portfolio with with a 9% stake in India Infoline Group.

India’s financial services sector continues to attract private equity interest. This week, the Carlyle Group invested an undisclosed amount for a 9 percent stake in financial services group India Infoline Group (IIFL).

IIFL operates in the retail and institutional brokerage sectors with its subsidiaries engaged in credit and finance, wealth management and global advisory services including advisory and portfolio management services to high net worth individuals and corporate clients. The company recently started its domestic asset management business with the launch of IIFL Mutual Fund and offers its services through 3,000 business locations, across 500 Indian cities and towns.

The investment was made by Carlyle Mauritius Investment Advisors, a part of Carlyle Asia Partners III (CAP III) which launched in 2007 at $2.55 billion, a Carlyle spokesperson confirmed.

The CAP series of funds has five major investments in the financial services industry in the region encompassing banking, insurance and housing finance businesses, including HDFC in India. CAP III received backing from LPs including California Public Employees' Retirement System, Dancap Group, Dancap Bank, Maine Public Employees Retirement System and West Midlands Pension Fund, according to data provider Private Equity Connect.

The financial services sector is a core industry focus at Carlyle. According to a statement, the firm has made equity commitments of more than $2 billion in Asian financial services businesses. Carlyle has had a presence in India since 2000.

“IIFL has built a leadership franchise with a nationwide distribution network in equity brokerage, insurance distribution and wealth management. We are particularly impressed by their ability to attract and groom management talent. We look forward to supporting the company’s growth plans including expansion of their financing and international businesses. We remain committed to investing in India,” Devinjit Singh, managing director of The Carlyle Group said in the statement.

Fund managers are increasingly drawn to India's non-banking financial companies. Kohlberg Kravis Roberts and the International Finance Corporation (IFC) recently invested INR4.4 billion (€69.2million; $97.4million) in Magma Fincorp, a provider of financial products including financing of vehicles, construction equipments, tractors and SME loans.