Advent International expects good returns from Aditya Birla Capital investment in 3-5 years

US private equity group Advent International on Thursday said it expects good returns from Aditya Birla Capital Ltd (ABCL) investment in 3-5 years after the latter raised Rs 2,100 crore via preferential issue to marquee investors.

In an interview to CNBC-TV18's Nisha Poddar, Shweata Jalan, managing director, said, "The reason we liked ABCL was essentially the mix of businesses they have. ABCL's three largest businesses, non-banking financial companies (NBFC), insurance and asset management are fairly market-leading businesses. The way ABCL built their portfolio for NBFC business, we thought, it was fairly balanced."

"The combination of the parentage which prevents liquidity issues that they may have, the market position of the businesses, ability to create value and gain market share, we thought it is an asset," she said.

Jalan said Advent is exploring more options to invest in financial services companies, "We do believe it is a very opportune time. We will continue to look for more financial services opportunities and if we find something interesting and non-conflicting with some of the things that we have done, we would certainly look at it."

In terms of assessing the risk-reward ratio of ABCL, she further mentioned, "The wholesale book we felt was very clean and that is what we rollout our comfort from. In mutual funds, there are some exposures. However, you have to look at it on a scaled basis whether the value has been factored in at this point in time. When we are looking at some of those funds, then the answer was yes."