Funds managed
| Fund name | Asset Class | License |
| JM Financial India Fund | PE- growth stage | SEBI AIF Cat 2 |
| JM Financial India Fund II | PE- early to growth stage | SEBI AIF Cat 2 |
JM Financial Yield Enhancer Distressed Opportunity Fund I
https://www.sebi.gov.in/sebi_data/intermediaryfiles/jun-2019/1560236759453.pdf
About the funds
JM Financial India Fund, launched in 2006, is a growth-focused private equity fund which made 13 investments across sectors including consumer services, financial services, infrastructure services, manufacturing, education and outsourcing services. It has exited eleven of those investments, and is on track to exit the remaining investments.
(https://jmfpe.com/JMFinancialIndiaFund)-current and exited investments.
JM Financial India Fund II is a sector-agnostic growth-capital private equity fund that:
- Intends to invest in early to growth stage companies that are looking to efficiently disrupt legacy business models, or provide superior products / services to their customers
- Looks to invest in business models which are proven, scalable, economically viable, and operate in large, underserved markets
- Will evaluate key financial and operating metrics to understand the potential growth of the business, along with its ability to generate high returns over a determined period
- Endeavors to add value to investee companies in specific areas, and regularly engage with entrepreneurs to create long-term value and realize investment gains
- Seeks to partner with ethical, professional and competent entrepreneurs who have relevant expertise and best-in-class execution skills
- Seeks to ensure a framework of strong governance, transparency and value systems
The Fund targets to invest in high-growth, small to mid-market companies, with a strong focus on financial services, consumer, IT / ITeS, infrastructure services and manufacturing sectors. It has made five investments so far, and continues to evaluate a strong pipeline of potential investment opportunities.(https://jmfpe.com/JMFinancialIndiaFund_II)-current investments.
About the AMC
- JM Financial Group forayed into the financial sector services as JM Financial & Investment Consultancy Services Pvt. Ltd. (JMFICS) in Mumbai in 1973.
- JM Financial is one of India’s prominent financial services groups, specialising in providing a spectrum of businesses to corporations, financial institutions, high net-worth individuals and retail investors. We are known for our diverse businesses which comprises of
(a) Investment Banking, Wealth Management and Securities (IWS) which includes fee and fund based activities for our clients
(b) Mortgage Lending which includes both wholesale mortgage lending and retail mortgage lending (home loans, education institutions lending and LAP)
(c) Distressed credit which includes the Asset Reconstruction business
(d) Asset Management which includes the mutual fund business.
Key staff
- Darius Pandole
https://jmfpe.com/Profiles?cid=ef9c748e-6ea7-466c-8f72-2243e718a164
Darius Pandole is the Managing Director & CEO of the Private Equity Fund Management business of the Group.Darius brings with him around 25 years of private equity investing experience in India. He previously worked with New Silk Route Advisors Private Limited where he worked as Partner from January 2007. His prior stints have been with IDFC AMC, IndAsia Fund Advisors, Indocean Venture Advisors, Duke’s Ltd., etc.His qualifications include a Masters in Business Administration (MBA) from the Graduate School of Business at the University of Chicago, and a Bachelors of Arts (BA – Economics) from Harvard University.
- Manish Sheth (Group CFO)- Joined the Finance department as an Analyst in January, 2001 and is currently the Group Chief Financial Officer. Holds a Bachelor’s degree in Commerce and is a member of the Institute of Chartered Accountants of India as well as the Institute of Company Secretaries of India. He specializes in the finance and strategic planning functions, shouldering almost the vital responsibility in managing the Company’s finances, including capital structuring, borrowing, rating, treasury, reporting, controls and procedures, risk management and compliance perspective.He oversees finance and related matters of flagship listed holding company, NBFC, Private Equity, Asset Reconstruction business and Alternate Investment businesses as well as setting up companies in international jurisdiction and overseeing international operations. He oversees the Investor Relations function for the group.
- Siddhart Kothari – Managing Director
https://jmfpe.com/Profiles?cid=6f773319-7b77-49f9-a1dc-a569e6ff67c2
- Prashant Purohit – Vice President
https://jmfpe.com/Profiles?cid=48feafbb-47af-4238-b195-f8748916d9f0
- Vinit Rai – Executive Director
https://jmfpe.com/Profiles?cid=da8d0345-30fa-4afd-a072-910b5119fc8f
Investment Philosophy (for firm)
- Provide growth capital to small and mid-sized Indian companies, primarily unlisted
- Invest through equity and/or equity-related instruments and other securities
- Back companies with a proven and scalable business model
- Take significant minority stakes, and have a high level of engagement with the management to add value where appropriate
- Assist investee companies with their growth strategies, without participating in day-to-day operations
- Sector-agnostic with strong focus on consumer and financial services
Media
Title: Once the economy emerges out of this crisis, new investment themes would emerge, Source: TheHindu article, Date: 18 May 2020
Private equity (PE) investments in India fell to about $30 billion in the financial year ended March 31, 2020, a decline of about 10 per cent from the previous year. The January-March quarter witnessed the most significant decline over the previous year, due to the onset of the Covid-19 outbreak. However, after the lockdown ends, the economy is likely to emerge out of this crisis on the back of opportunities arising out of emerging trends such as work from home, manufacturing activities shifting to India, breakthroughs in healthcare and medical sectors and a new lease of life for consumer and financial services.
Due to the tremendous volatility, it is likely that PE funds will explore more structured instruments like convertibles, and mezzanine capital, among others, rather than relying only on pure equity.
Title: The Indian Private Equity and Venture Capital Association (IVCA) held its conclave in New Delhi to celebrate 10 years of private equity and venture capital in India, Source: moneycontrol, Date: 14 May 2012
https://www.moneycontrol.com/news/business/companies/-1873537.html
Darius Pandole, Partner, New Silk Route Advisors, says the last decade has been one of spectacular growth for Indian private equity. “We have gone from being an industry that did maybe investments of a billion or less per annum to now consistently doing USD 10 billion or more per annum. We have gone from having a handful of funds to now having over 200-300 funds. The number of people in the industry has increased. The number of funding has increased and the number of deals being transacted has increased”
“What has also happened during this timeframe is that not only has the industry grown in size and scale but it has matured very nicely in as much as it has become nicely segmented. Today an entrepreneur can raise seed capital funding of $100,000 or $200,000. He can generate venture funding, growth funding or go all the way up to the big buyout funds where all the big global buyout houses are here to raise $100 million or more per transaction. So that in some sense is a very good illustration of how the industry has matured over the last decade.”
Title: Darius Pandole of JM Financial talks about opportunities in financial services and consumer services, Source: IVCA
https://ivca.in/ivca-pe-vc-video-series/
How has the private equity ecosystem evolved?
Industry is very mature today and has learned lessons from the past. Secondly, the industry is much more accepting of us as an asset class today.
In 2006-07 we saw a huge capital inflow relative to the opportunities available.
Entrepreneurs have matured in terms of welcoming investors as partners in not only accepting funds from them but letting them drive the agenda.
Risks in India:
Enormous, however political risk is less because Indian economy has proven irrespective of the government the economy will keep moving.
Risks are more on the ground level like in selecting the right sector, being able to grow the business in spite of the domestic and foreign competition and risk of backing the right business model.
What segments does JM financial focus on?
Small and midcap segment which we think is relatively less crowded. We do not invest in startups which means we are not taking any business model risk. Two sectors where we spend more time than others are financial services and consumer services.
Title: In Business – Seeing Rise Of PE To PE Sales: Darius Pandole, Source: Bloomberg Utv, Date: 11 October 2013
https://www.youtube.com/watch?v=0j58UEhPz08
An old interview assessing the PE market in 2013.
Analyst questions
- What is your investment philosophy?
- Why should one invest in India, in private equity as an asset class and why in your funds?
- Where do you add the most value is it at entry, operations or exit in a company?
- Your investment team as well as the leadership team does not have any females. Any comment?
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