Friday, May 18, 2012


Stupidity has no bounds. Am I too harsh here? Just read (red) this article about Bain and TPG's tryst with Lilliput. Something about numbers being fudged and blah blah. This is related to my earlier post which was satirically named; PEs, even though they seem to be here for the long haul, tend to eye rapid deal closes.
How did established funds with 'intelligent' managers miss Lilliput's supposedly fudged numbers? India is a certain way and may be Lilliput is in the wrong, but that does not permit the author of the above mentioned article to say ridiculous things about investing in India.
True, PE firms have not garnered the returns they wanted but it reminds me of a maxim: One doesn't get returns just because one wants them
Good investment firms with good heads (anatomical and figurative) who refuse to overpay for potentially stupid businesses (and/ or) tend to make money. Therefore, Warburg Pincus investing in Kotak Bank in 2003 made sense but them investing in Moser Baer, believing in the CD (Compact Disc (For people from the future, a CD is a portable storage device which even now (in 2012) is hardly being used)) business, was ridiculous (hindsight?).
I have used too many brackets here (For Americans, we South Asians call parenthesis, brackets).

Coming back to the topic at hand. All PE funds need not make money just because India was deemed to be a 'hot' destination for funds. Almost everything has a price, and just because one has money doesn't mean one should spend and/ or overpay for assets.

BTW, mouth watering valuations visible in the Indian market right now... if S&P is reading this, please downgrade India so that more money flows out :P
dum fuks

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