Mid-market private equity firm Sanaka Capital and US-based investment firm Kora Management will exit Edelweiss Wealth Management by selling their stakes to PAG Asia Capital as part of a broader deal.
Asia-focussed PAG will acquire a 61.5% stake in Edelweiss Wealth, its parent Edelweiss Financial Services Ltd informed the stock exchanges.
PAG will buy the stake through a combination of primary and secondary shares purchases from Edelweiss Group for Rs 2,366 crore ($326 million). In addition, it will also buy Kora and Sanaka Capital’s stake.
Originally, in August 2020, PAG had announced the acquisition of a 51% stake in the wealth manager for Rs 2,200 crore.
As per the revised deal, Edelweiss Group will own a 38.5% stake and will have an option to increase its stake to 44% in the future, the company said.
PAG manages over $40 billion in assets across private equity, private debt, real estate and hedge funds. It said previously it was looking to invest more than $1 billion in total in India over two to three years.
Edelweiss said PAG’s primary fund infusion will help strengthen the equity base and provide it with growth capital. It eventually plans to list the wealth management company to let Edelweiss and PAG unlock value.
Edelweiss Group didn’t immediately respond to queries from The Capital Quest on the exact deal value for the 61.5% stake and details of the stake purchase by PAG before buying out Kora and Sanaka’s stake in the company.
Separate emails sent to Sanaka and Kora seeking details of the amount they are getting from the stake sale did not yield a response till the time of publishing this report.
Edelweiss Wealth comprises the wealth management and capital markets businesses under the Edelweiss Group. The diversified financial services group offers products and services in investment banking, mutual funds, insurance, structured finance, asset reconstruction, and credit among others.
The wealth management vertical posted a net profit of Rs 180 crore for the nine months of 2020-21 on revenue of Rs 880 crore. It serves more than 2,400 rich families and 670,000 wealthy individuals with assets under advice and management worth Rs 1.45 trillion.