• Insights

Entrepreneur (E): How has the transition been from a high profile job at ICICI Ventures to your own PE fund?
Renuka Ramnath (RR): Surprisingly smooth. It has been a smooth and steady process of creating Multiples. I never felt I was merely doing a job at ICICI and probably will forever relate myself to ICICI. As far as whether the market will believe me as an individual, separate from ICICI, well, I think I will be given the benefit of doubt. It has indeed been a very delightful journey so far.

E: How difficult has it been for you to get away from the comfortable settings of a corporate job to being an entrepreneur?
RR: It would be called a difficult change if I start counting the comforts that I had: the luxuries and the big brand name that I carried with me. My previous job profile gave me the comfort of a capital and a paycheck every month. But if I look at this new step as a clean break, then the change has been very easy because when it all began, I told myself to start thinking like a startup entrepreneur. I had to set goals for myself, create milestones and timeframes to measure my success. Being realistic in terms of timeframe, getting comfortable in getting a ‘no’ for an answer from your best acquaintances, not getting put off by someone saying no to investing, needs getting used to.

E: When you went on to start Multiples, what were the objectives behind it? And have the objectives changed with the progress of your company?
RR: My real long-term idea is very simple: how to channelise long-term capital from serious long-term providers which is largely endowment funds, pension funds and others. Over a long period of time, MAAS would like to look beyond India. This is my real excitement about PE: it brings appropriate capital to deserving entrepreneurs to create valuable enterprises, to see companies which were not there five years become valuable companies, to see individuals who were not known earlier go through their endeavor of achieving great success.
The aspiration of how big will we become, how quickly we will reach there, is not my real objective. We have put together our first fund, we have a very good team in place and as a team we want to go out and grab the best deals and generate high returns. We want the companies to be proud of us for whatever we have done for them, for making them a success.

E: What is your first fund size? Who are your investors and which sectors would you primarily be looking to invest in?
RR: Our first fund is a Rs.2,025 crore account. We want to invest Rs.90 crore to Rs.135 crore as our average ticket size and would like to do few Rs.225 crore transactions as well, preferably asset-like businesses. It has to be specialized manufacturing/control transactions too.

E: What stage do you want the companies to be in and what would your typical investment period be?
RR: I would prefer our investment companies to be in mid to late stage. We would not be looking at startups because we don’t have a mandate to invest in new companies. Our typical investment period would be five to seven years but in some cases, we may look at an early exit.

E: When can we expect the first return investment announcement? Have you set a benchmark on the number of investments you would be looking at doing each year?
RR: We should be able to complete three investments by early or mid July. Typically the first fund will last for three-four years.

E: What is your viewpoint about entrepreneurs in India?
RR: I feel the process of building a company in India should be more systematic and more transparent, which would require a lot of structural change in the prerequisites for creating a company by an entrepreneur. The amount of effort, ambiguity, risks that our entrepreneurs take, I have to salute them everyday for it. The conviction they have in what they are trying to do, the commitment they have for their cause, is highly commendable, keeping in mind that the external environment is not a very facilitative one. It is a highly challenging one. There is much more coping to do in India. This results in different beliefs and values as compared to the ones that appear in western markets. Some industries are less-affected, some are more affected. If we let free our entrepreneurs’ mandate from dealing with such structural issues, I think we can get them to do wonders with the abilities they possess.

E: You are likely to be a key Indian PE player. Do you think you will have a different perspective to the Indian investors/entrepreneurs as compared to the rest of the PE players from around the world who invest in India?
RR: I will have to give due credit to my international peers. The situations in which they get comfortable and the situations in which Indian players get comfortable could be different. International players understand India pretty well nowadays.

E: Has the journey from the CEO and MD of ICICI Venture to an entrepreneur who created MAAS PE changed you, and how has it been enriching for you?
RR: At ICICI Ventures I went thorough the process of raising money for the fund which was in itself a transformational experience. That had already made me live the life of an entrepreneur. But I still had the comforts of being linked to the entire ICICI brand. Whereas here, it is a do-or-die situation. I cannot switch departments like I could have in case I failed at ICICI Ventures. One has to appreciate the life of an entrepreneur, how one deals with ambiguity, has to think about investors, the conditions under which one has to raise money, how one has to work around a team and lead it. I now have a better understanding of an entrepreneur’s psyche.

©Entrepreneur July 2011

Tags:
capital, entrepreneur, fund, ICICI, MAAS, Multiples Alternate Asset Management, PE, renuka ramnath