KKR elevates Sanjay Nayar as chairman; Gaurav Trehan to head PE business

The move comes at a time when the global PE fund has had a record investing year and is focusing on pure play PE business

By Pooja Sarkar Forbes India Staff

Published: Dec 21, 2020 07:04:49 PM IST

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Global private equity fund KKR on Monday announced that Sanjay Nayar, chief executive officer of the India office, will become chairman of KKR India, effective December 31. As part of the transition process, Gaurav Trehan, who joined the firm in 2020, will head KKR’s private equity (PE) practice in the country. His elevation comes at a time when KKR India has had a record investing year despite the pandemic. In 2020, KKR sits on top of the investing table in India with a capital deployment of nearly $3.2 billion.

In May, KKR invested Rs. 11,367 crore for a 2.32 percent stake in Jio Platforms, making it its single largest cheque in Asia to date. It further deployed Rs. 5,550 crore for a 1.28 percent stake in Reliance Retail Ventures Ltd in October.

The firm also acquired a majority stake (54 percent) in Mumbai-based drug manufacturer JB Chemicals for Rs3,100 crore. JB Chemicals is a listed firm and KKR agreed to acquire 41.7 million shares of the promoters at Rs. 745 apiece.

KKR has been investing in India since 2006 and established its Mumbai office in 2009. Nayar has been the face of the firm since its inception in the country and Trehan’s recruitment as head of PE practice heralds a change in the way the firm will operate. In fact, last October, when BV Krishnan, then chief executive officer of the non-banking financial company (NBFC) vertical, stepped down due to personal reasons, Nayar had taken over the reins of the NBFC business, too, apart from taking care of the PE vertical.

As of September 30, KKR has deployed more than $5.8 billion in PE investments in India and $10 billion across asset strategies, including credit, infrastructure and real estate. Earlier this year, it also acquired five solar energy assets from Shapoorji Pallonji Infrastructure Capital for Rs. 1,554 crore.

While KKR went on a shopping spree this year, especially investing in Reliance Group’s assets, one thing looks certain—the firm is now looking at focusing on pure play PE business. The PE firm has been stitching a merger of its NBFC book with Mumbai-based InCred which has a retail franchise since the middle of 2020. The deal is expected to be closed soon and Nayar is overseeing the transaction. The firm lends in India through its two credit arms—KKR India Financial Services Pvt Ltd, the wholesale lending arm, and KKR India Asset Finance Pvt Ltd to real estate firms—and saw some of its investments in the corporate lending book turn sour. The pain is largely being felt at KKR India Financial Services, the NBFC. KKR’s NBFC woes were first reported by Forbes India.

A person aware of the matter indicated that post the merger, while KKR will own a majority, the business will more or less be run by Bhupinder Singh, founder of InCred, who was the former head of investment banking at Deutsche Bank Asia-Pacific. While the real estate book still lies with the firm, it will be looking at solutions for it too.

In October, it also launched its renewable energy platform, Virescent Infrastrcuture, to acquire green energy assets in the country. This portfolio consists of the Shapoorji assets it acquired earlier this year. The platform is being led by Sanjay Grewal.

While India has been an active market for KKR during 2020, the coming year will be important as it raises capital for its Asia-dedicated buyout fund and real estate fund.

According to a report in October by analyzemarkets.com, KKR has raised $13.1 billion in total equity commitments for its fourth Asia PE, including parallel vehicles, according to the firms’ filings with the Securities Exchange Commission. It would make it the largest Asia-focussed fund raised till date.