ChrysCapital Founder Ashish Dhawan To Step Down From July 2012


In the biggest ever leadership transition in the Indian private equity industry, Ashish Dhawan, Founder and Senior Managing Director, ChrysCapital Investment Advisors, the homegrown private equity giant, has decided to move on. In his next innings, Dhawan may be looking to pursue his interests in philanthropy, particularly in the area of K-12 education.

Sanjiv Kaul, Managing Director, ChrysCapital confirmed the development to VCCircle, adding that Dhawan will continue to lead the organisation till July 2012.

Dhawan's move comes just a few weeks after the senior leadership at Sequoia Capital India (Sumir Chadha, KP Balaraj, Sandeep Singhal and SK Jain) announced the break-up from the US firm and grouping together under their original firm Westbridge Capital Partners. However, there is a difference. Dhawan is getting out of the active private equity role and is moving to the philanthropic sector, while the erstwhile Sequoia team is going to focus on public market investments and are not retiring.


But Dhawan's decision to quit PE marks the end of an era in the Indian private equity - which is about a decade old during which the sector matured from early stage to growth to PIPEs.

"Nothing changes until July 2012. I have full confidence in our ChrysCapital team and know that the firm will be in good hands after I leave. I plan to eventually focus my energy on not-for-profit K-12 education in India," Dhawan told VCCircle. ChrysCapital, which manages about $1.9 billion through five funds, became one of the biggest funds in India under the leadership of Dhawan.

Leadership Transition Besides Dhawan, Brahmal Vasudevan, one of the managing directors, will also be leaving ChrysCapital. He will step down later this year to focus on the investments in South East Asia and India. The remaining six managing directors - Ashley Menezes, Gulpreet Kohli, Kunal Shroff, Sanjay Kukreja, Ravi Bahl and Sanjiv Kaul will lead the firm going forward based on equal partnership.


In an organisational revamp, the present responsibilities of Dhawan and Vasudevan will be redistributed amongst the six managing directors whose roles will be: Ashley Menezes will lead client services, due dilligences, finance, legal, compliance, indutsry representation and human resource; Gulpreet Kohli will manage client relationships and cover the real estate and consumer internet domains; Kunal Shroff will oversee the infrastructure and power sectors; Ravi Bahl will manage the financial services vertical; Sanjay Kukreja will lead the business services and manufacturing verticals and Sanjiv Kaul will oversee the telecom, pharma and healthcare sectors.

Dhawan's move marks a significant development in the Indian PE landscape given that he is a veteran almost synonymous with the evolution of the industry in the country. The Harvard passout, who founded ChrysCapital with Harvard buddy Raj Kondur in 1999, can certainly be credited for raising the return expectations of institutional investors from an Indian private equity portfolio. Numero Uno

ChrysCapital earned its enviable position in the industry because of its boutique approach to PE investing and its customised investment strategies. The fiorm shifted from pure private equity to a public matrket approach and at the end of it all, the firm earned money for its institutional investors. As long as the profits were distributed, the LPs were happy.


The other thing was that after the initial shakeout in the team (Raj Kondur left, then other seniors like Luis Miranda and Shujaat Khan also parted ways), the firm has managed to keep the rest in tact. Brahmal Vasudevan, Gulpreet Kohli, Kunal Shroff, Ashley Menezes and Sanjiv Kaul have been with the team for anywhere from five to eight years now.

Investment Style ChrysCapital has also looked beyond the obvious to take its investment bets. From venture to growth to now a public markets approach, the fund was very quick to adapt to what worked. They have been ahead of their peers in spotting new trends (such as finance and wind energy) and evaulating a sector, adopting a unique strategy (just public markets), or, take the latest one, even taking a call on reducing the fund size.

Track Record ChrysCapital's investment and exit track record reads like this: In one of his earlier deals, ChrysCapital Investment Advisors invested in Gurgaon-based BPO startup Spectramind which is till now considered to be an exit milestone.


When Wipro bought Spectramind in 2002, industry estimates pegged that ChrysCapital earned $60 million on a $10 million investment. This was also a private equity-backed company acquired by a local buyer or a first domestic trade sale in industry parlance. Spectramind went on to prove right Dhawan's bet on a sector or a top-down approach to investing.

Quickly identifying growth in the IT/BPO outsourcing space during the early days of this decade, Dhawan led multiple deals in this sector often in quick succession. So, Spectramind was followed by Transworks and Global Vantedge, which were acquired by the Aditya Birla Group and Essar Group, respectively.

After the outsourcing boom, Dhawan's next bet was on the financial services space with deals in Yes Bank, Axis Bank and Shriram Group. ChrysCapital first invested in Axis Bank in 2003 when it was called UTI Bank at Rs 42.75 per share.


The next wave Dhawan rode on was the construction and the infrastructure boom. ChrysCapital invested in IVRCL, Gammon and Simplex in 2005-07, making a return of 4-5 times its investment in these companies. Then came a multibagger in wind energy maker Suzlon, a more recent milestone by the investment firm. It invested Rs 100 crore in 2004 when Suzlon was yet to go global, and exited in two tranches by 2007, making a reported Rs 1,300 crore.

Apart from taking concentrated bets on the sector, Dhawan has also made very smooth transitions in the firm's invetsment strategy, and never went after discovered spaces.

In 2008, ChrysCapital made record investments of about $200 million in Infosys Technologies and $220 million into HCL Technologies, the first by a PE firm in the tech space. In 2009, it invested in Mahindra & Mahindra Financial Services Ltd and Spanco Ltd via the open market route. It has mirrored a hedge fund since 2008, having made more than 10 such investments during the period, according to data from VCCEdge.


The fund has also taken other unusual calls. Following the economic crisis post Lehman collapse, Chryscap decided to slash its fifth fund from $1.25 billion to $950 million in return for flexible investment approach (read public markets). This was the first time a fund did such a thing in India probably because a scenario for such a decision never was there.

ChrysCapital definitely had bad days too - especially during the initial phase when the firm wrote off a dozen investments. But the story is about how it rose to become one of the most successful firms in India.

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