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US billionaire makes India call

June 23, 2006 02:57 IST

George Kaiser, the thrifty American billionaire who made his fortune by betting on the price of oil, has set his eyes on India after snapping up stakes in Australia and Israel during the last three years.

His investment fund, Argonaut Private Equity, will invest "a few hundred million dollars" of his nearly $2 billion it manages in Indian companies over two years.

Thanks to spiralling oil prices, Kaiser had found his net worth zooming 40 per cent in 2005 alone, putting him at the 132nd spot on the list of the world's richest in 2005.

"The question everybody asked us when we announced that we were going to invest in India is --'but what about the funds who are already there'," says Anil Khatod, the newly-appointed pointman at Kaiser's firm in charge of Indian investments. 

"But our idea is... we are not constrained by what our shareholders think, there is only one. So, our investments will be a lot quicker and more flexible. I think India is brimming with bright minds with bright ideas and all that is needed is to provide a runway for them to expand and develop," he points out.

Kaiser, who is estimated to be worth well in excess of $5.5 billion, has already committed nearly $2 billion to the fund.

"The least of our concern in India is availability of cash," Khatod, a veteran of technology companies, including communication major Nortel, says. 

Over the last few years, the firm has already invested in Japan and China in Asia, but Khatod says India is going to be the theme for the next three years.

"Our eventual investment in India will be much bigger than that in China because we think India has got better companies and the right atmosphere for entrepreneurship to flourish," he says.

Argonaut has already tied up with eight associates, including research wings of brokerages and private equity firms, to share intelligence on investible companies and works through a small team of employees in India.

Argonaut invests between $1 million and $200 million (Rs 4.5 crore to Rs 900 crore) in individual companies, holding specific investments for up to 8 to 10 years and plans to continue the strategy in India.

"Historically, nearly 60 to 65 per cent of our investments have been in technology companies since in the US, venture capital is usually provided to such.

But in India, we see a great opportunity in domestic-market driven companies also. For example, from what I know so far, sectors like retail and infrastructure are poised for good growth," Khatod points out.

Sreejiraj Eluvangal in Mumbai