Religare Enterprises Ltd., a New Delhi-based brokerage, insurance and investment banking firm, has opened shop at the epicenter of the U.S. financial industry in Manhattan and is trying to build a multistrategy investment management conglomerate.
Its strategy is to buy a majority interest in boutique investment management firms and let the acquired firm's executives continue to control the day-to-day work of investing.
Formed this year, Religare's investment management subsidiary, Religare Global Asset Management Inc., already has bought majority stakes in two firms: Landmark Partners, a private equity and real estate fund-of-funds firm with $8.3 billion of committed capital; and Northgate Capital LLC, a private equity fund-of-funds firm with $3 billion under management.
Religare's board has approved committing up to $1 billion to strategic investments in diversified asset management businesses globally.
And this is just the beginning. Religare Global Asset Management executives plan to build an investment management platform offering a mix of alternative and traditional asset classes, said Matt Mongia, Religare Global's managing director in New York.
“We were keen that the first one or two would be in the alternative space and the less liquid side of alternatives because it provides a set of fund offerings that have medium- to long-term lockups and a high degree of predictability of cash flow,” Mr. Mongia said.
And the investment management business is global. Religare Global is shopping for firms around the world, Mr. Mongia said.
“We prefer majority stakes or minority stakes with a path to a majority interest,” he said. “We are looking at opportunities in Europe, Australia, other parts of Asia and Latin America.”
However, Mr. Mongia expects most of the acquired firms to be based in the United States. “The U.S. has far and away the deepest and the most developed” investment management business, he said. “Particularly, if you look at the independent boutique firms, they are more compatible with our philosophy and culture.”
In Asia, for example, investment management firms are more likely to be arms of larger financial companies, he said.
“We have a bias toward firms that are independent boutiques operated by their founders,” Mr. Mongia said.