Anil Ambani plans to launch a global buyout fund of about $5 bn aimed at telecom and related sectors and is in talks with billionaire speculator George Soros, private equity giant Blackstone group and Singapore's Temasek for participation. Mr Ambani has already contributed $500m of his personal money to the fund as anchor investor.
He has received commitments of up to $2.5 bn from several investors. Mr Soros, Blackstone and Temasek are likely to participate soon, people familiar with the developments said. The name of the fund has not been decided but it is likely to be headquartered in Singapore.
While Mr Ambani will be the fund's main sponsor, the management team is likely to be separate. The money Mr Ambani has invested is his personal wealth, sources said. The fund will focus on buying companies in sectors like media, communications technology and software, IT-related services, BPOs, telecom or broadband services.
The mandate will be global and the fund will not operate in India. The objective is to take advantage of the vast opportunities in the global telecom and communications space. With a large corpus on which additional debt can be easily raised and with the backing of investors with deep pockets, the fund could look for big-ticket acquisitions in Asia and the Middle-East.
Talks are also on with some telecom operators in Saudi Arabia, Bahrain and Oman for equity participation, people close to the development said. A mega buyout fund originating from India is quite rare, but the global M&A market has been rocked by a surge in the number of acquisitions by buyout funds recently.
The value of acquisitions has risen sharply and even giant corporations like Vivendi or Ford are no longer immune to their overtures. Mr Ambani, whose Reliance Communications has become the second-largest wireless provider with a market cap of over Rs 80,000 crore, could also be pursuing his global ambitions through this fund.
A tie-up with either Mr Soros, Blackstone or Temasek would make him a global investor with the possibility of some benefits to RCL. For instance, it could work out a commercial arrangement to provide some services with a company owned by the fund in return for a fee.
Alternatively, it could also get access to unique technology developed by some overseas company. Though it is a global fund, its activities are likely to be confined to Asia, the Middle-East, Africa and possibly Europe.