Education has received the largest response among other sectors in the last 12 years- Mr. Imran Jafar
In an exclusive interview with the General Partner, Gaja Capital partners,Mr. Jafar said,"It’s important to think about the present than future. And most importantly, celebrate small wins."
What are the sectors that you are focused in 2017 and also any Investments in Education that you are looking forward to?
We are 12 years old now and for the last 1 2 years and 3 funds we are focused with 3 sectors namely Education, Financial Services and Consumers. And we choose to stay focused on these 3 years. We are a team of specialists and education is our largest segment. Our typical investment size is 20-30 million dollar and we typically invest in significant minority stake or increasingly to own control on these companies.
Are you looking to partner with any of the international firms who are looking to invest in this sector?
If you mean global universities, we had several conversations with several top universities across the world to see how we can bring them to India. They are still studying the regulatory environment because what we need is financial investors with a n ability to repatriate profits otherwise you are unable to create value in exit from these ventures.
How do you think the startups in the education space are looking for investments in this sector are making a mark?
We are seeing increasingly higher quality entrepreneurs stepping in and building valuable companies in the education sector. There is a proliferation of startups in education. We cannot invest on startups because we invest in cdc growth situation so we typically look for companies with revenue of 100 to 500 crores. But we have a fairly large portfolio and we are very acquisitive so we are constantly meeting startups to either fill our product gaps in our portfolios or to hire for the teams.
Comment on consolidation in the industry. Do you feel the need to elevate the experience of Education in India that requires consolidation?
I think so, because we are seeing record levels of interest especially from investors backed small education companies that are looking to merge with larger companies. So we are seeing a lot of platform place emerging in the education sector and along with our portfolio companies and ourselves. We would like to be at the forefront at their strategy.
With respect to 2017, any big expansion plans for Gaja?
We just raised our 3rd fund, a 240 million dollar fund last year along with 3 investments from it. I must say, there is a very long way to go in investing this fund. We are open for business and actively looking for good high quality companies in Education and financial services.
What happens in an investment gone sour and how does an exit for an investor or a private equity fund happen in that case?
It is hard. And it is not just limited to education alone. One of the most important elements of private equity investment is to ensure that you get liquidity in exit. Fortunately for us, in the past 12 years, we have been able to get the same; the price we have had to pay in certain situation is that we were prepared to hold for longer.
So, we invest in companies that can either go public or at the very least would be attractive to our strategic buyer. If a company doesn’t meet this 2 criteria’s, we don’t invest in these companies.
Among the 3 sectors that you are investing, which one will you call your personal favorite?
Well, it has to be Education because that’s where I have spent 80% of my time in the last 12 years. But I also like healthcare where I worked at Dr. Reddy’s. We have added to the team recently at Gaja to uplift our healthcare expertise. Education and Healthcare are the 2 most interesting sectors in addition to financial services.