Putting India on the map: EVCJ speaks to Warburg Pincus, the firm behind one of the country's best ever exits.(FEATURE: INDIA)(Interview)

New York-based private equity firm Warburg Pincus is legendary in the Indian private equity space for its spectacular exit from Bharti Airtel. The PE firm took a bet on ambitious telecom entrepreneur Sunil Mittal and bought 18.5% of his company Bharti between 1999 and 2001 for just under US$300m. Having helped it grow into India's largest private sector telecom company, Warburg Pincus fully exited by 2005, pocketing US$1.9bn along the way. The transaction served as a wake-up call for PE firms everywhere--India was a place capable of generating serious returns.

Warburg Pincus is one of the largest private equity investors in India, having put in over US$1.5bn over a 12-year period. It has invested in top tier firms across a range of sectors, from auto component manufacturer Amtek Auto to Kotak Mahindra Bank to pharmaceutical major Nicholas Piramal. The majority of its holdings are growth investments, although it has done early stage investing in Internet portal Rediff.com. Last year, the firm did its first buyout deal in the Indian market, when it teamed up with an Indian tyre industry entrepreneur to acquire Israel-based Alliance Tire Company.

EVCJ spoke to Leo Puri, a former director of McKinsey, a managing director at Warburg Pincus in Mumbai.

Are you turning your attention to any particular sectors now?

We've been quite agnostic on sectors. Our approach is to back strong management teams, which has led to a combination of growth investment and some early stage investment. We support management--with governance participation--with an investment horizon of five to seven years.

With the landscape dominated by business families, have you encountered resistance to your involvement in governance?

There has been a culture shift. Entrepreneurs have realised that governance helps. The initial reluctance has melted away when they've seen the benefits. And we, as a firm, are averse to policing management constantly. We're looking for alignment. And we form an assessment on whether or not we can work with the management early on. Also, our initial investments have created strong references for us.