Bain Capital to acquire 25% in IIFL Wealth; General Atlantic, Fairfax part exit

Bain Capital, the global private equity firm, said on Thursday that it has agreed to acquire a 24.98% stake in IIFL Wealth Management Limited for Rs 3,680 crore ($485.6 million).

Existing investors General Atlantic and Fairfax India Holdings Corporation will make a partial exit from IIFL Wealth, part of the homegrown financial services firm IIFL Group

Bain Capital is proposing to acquire Rs 2.2 crore of shares constituting 24.98% of the company's shares at Rs 1,661 per share for a total consideration of Rs 3,679.95 crore through a share purchase agreement executed on March 30, 2022 with General Atlantic Singapore Fund Pte. Ltd. and FIH Mauritius Investments Ltd,” IIFL Wealth said in a regulatory filing.

The exact shareholding post-acquisition is yet to be disclosed.

The deal will be through Bain Capital’s investment vehicle BC Asia Investments X Ltd. The transaction is subject to regulatory and other customary approvals, the filing added.

As of December 2021, General Atlantic owned 21% of IIFL Wealth, while another 13.64% was owned by FIH Mauritius Investments Ltd, a wholly owned subsidiary of Fairfax India Holdings Corporation, owned by Indian born Canandian billionaire Prem Watsa.

In a similar space, Asia-focused PE investor PAG had picked up majority stake in Edelweiss Wealth Management in 2020.

Mumbai-based IIFL Wealth Management is among India's leading alternative wealth and alternative asset managers in India with $44 billion (approximately INR 3.3 trillion) in assets (as on December 31, 2021).

Founded in 2008 by first-generation entrepreneurs, Karan Bhagat (MD and CEO) and Yatin Shah (Joint-CEO of IIFL Wealth), the firm offers wealth management, asset management, lending solutions and estate planning services for individuals. high net worth individuals and ultra- High net worth individuals Wealth, offices and family institutions.

The company has approximately 900 employees and a presence in four major global financial centers and 23 locations in India.

Its product suite includes Alternative Investment Funds (IDAs), Portfolio Management Services (PMS) and Mutual Funds (MFs) spanning across asset classes of private and public equity, fixed income, credit and real estate solutions asset classes. The wealth manager has been its team and making key appointments with the heads of the private credit and private equity sectors.

In 2019, IIFL Group was divided into three listed entities: Finance, Wealth and Securities. Fairfax recently made its first partial exit from IIFL Finance.

"Bain Capital's investment is testament to our strong leadership advantage in the financial services space and our team's ability to continue to execute and grow the business at scale. We look forward to having them on board," said Bhagat, managing director and executive Officer, IIFL Wealth Management.

JPMorgan acted as exclusive financial advisor to the sell side of the transaction. Axis Capital and NovaDhruva acted as financial advisors to Bain Capital.

Bain Capital was founded in the United States in 1984 and today has a global team of more than 575 investment professionals.

Since inception, the company has made primary or add-on investments in more than 1,000 companies. It focuses on key vertical industries including healthcare, consumer/retail, financial and business services, industries, media, technology, and communications.

"The company (IIFL Wealth) is well positioned to capitalize on the secular tailwind of wealth creation in the economy, increased funding and increased penetration of formal wealth management. We look forward to working with the team in the next phase of IIFL Wealth’s growth journey," said Pawan Singh, Managing Director at Bain Capital.

In addition to private equity, Bain Capital invests in all asset classes, including credit, real estate, public equity and venture capital, managing total assets of more than $155 billion.

Bain Capital has offices in Boston, Chicago, New York, Palo Alto, San Francisco, Dublin, London, Luxembourg, Madrid, Munich, Guangzhou, Melbourne, Mumbai, Hong Kong, Seoul, Shanghai, Sydney and Tokyo.

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