The Czarina of Private Equity Market

Renuka Ramnath is the Founder, MD and CEO of Multiples Alternate Asset Management Private Limited (Multiples), an India-focused manager of private equity capital. Multiples today manages USD 1 billion of Private Equity Funds from marquee institutional investors of repute. She has spent over three decades in the Indian financial sector across private equity, investment banking, and structured finance. As one of the early private equity investors in India, she has played a pivotal role in shaping the private equity industry by leading from the front and by being a participant of changing winds in the industry.  She has opened up the landscape to several global investors and shone the light on the attractiveness of the industry by demonstrating through successful investments across the spectrum like buyouts, control, growth, and building /incubating new businesses. In her last role as the MD & CEO of ICICI Venture for close to a decade, she has contributed in many ways to the evolution of that firm to one of the largest private equity funds in India.

She holds a Bachelor of Engineering from VJTI, University of Mumbai and an MBA from the University of Mumbai. She has also completed the AMP from the Harvard Business School.

At ICICI I played various leadership roles – investment banking, structured products group, e-commerce group and perceived as a successful career ICICI professional. But it was only in 2001, when I joined ICICI Venture that I found out my real calling — private equity. In 2009, I decided to move from ICICI due to two reasons – pursuit of what had become my passion i.e. Private Equity and secondly the circumstances of ICICI Venture (ICICI Venture was a subsidiary of the ICICI group and the objectives of a subsidiary became subordinated to those of the parent company).  So after a certain point, it became more of a limitation for me than a competitive strength.

As I stepped out with this body of experience, to start afresh was not easy but I was overwhelmed with the support I found within the friends and mentors and leaders in the financial world. They were willing to share their wisdom and help me with the pursuit.  I was heartened to be told by heads of many banks who were willing to offer me their top posts. I couldn’t believe the market really recognized me. These very financial institutions and a few key International Institutions were ready to back me and put me into business. What they were backing were a combination of my experience in the PE industry, my competencies and the professionalism I would bring to such an independent platform. Those initial few months /years were difficult and humbling, The lessons learnt at such junctures in life always help you positively, it was not right to get carried away with the fortunate occurrences that come your way  - the resolve to  work hard and achieve what you have therefore committed with yourself and your well-wishers only becomes stronger.  

It is largely upbringing; my value systems are strong. The personal rollercoaster rides I have had – loss of my husband and all of that – it kind of teaches you to the bones that you can lose everything. That’s why I am thankful for what I have. In your good days, one should prepare for one’s worst days. That for me has been my roots. I am very achievement oriented, not because I want to carry it in my head, but the satisfaction I get from it. 

For me, at every right moment, the right people came in my life, and gave me the right advice – so I never got into a game of doing something and then undoing it. My spiritual guru was there for guidance and the fact that I was not under any pressure, played a huge role. I had the competency to do it, and I think I earned the right to set up an institution in this country, in my own right.

Those were my motivations and not the fact that I had to prove myself to anybody. It was amazing how quickly I forgot my separation with ICICI where I had spent 20 plus years. And the beauty of all this was that I could bring my 25 years of experience to the market with no obligation, no pressure, - for the pursuit of what you do best and for building something new. That was very energizing. 

When you are holding somebody else’s banner and building it – the pressures are very different. When you are building something of your own – you can do it on your own without pressures. For me, Multiples is analogous to a baby. I will take more risks when it can handle more risks. But I am building the foundation for it – so I keep showing the big picture to my team and I also tell them that one day we will have people who are not in this room or that people who are in this room won’t be here tomorrow. I am mentally preparing my team for all possibilities – but the institution will go on. At all times, manned by highly capable people, who, with the right objectives will come here to nurture good people, and a good company. And we will not do any compromises for any short-term uplifts. Each and every decision has to be weighed in the context of long-term. 

One of my big themes is the ownership. Corporate India will undergo a big change. Even today, more than 50 percent of the stocks of top 500 companies are held by families. That ownership will undergo a change. It will all be institutionally owned, as in private equity. In that gain, we will play a very important role along with in creating companies that are not there today, and in the overall governance of these companies. These are the pillars — environmentally conscious, socially responsible and good governance forms a part of a non-negotiable mantra in today’s day and age. And Multiples will always exist.

Something like this takes a long time. But I think entrepreneurs and the industry have taken to private equity much more than they did 10 years back. Today, international investors are comfortable investing their money in India and we have grown in terms of how to administer products. 

M&As are not as prolific as they should be. I think as the economy matures, M&As will become quite the norm, which will give rise to mega deals for private equity and ownership by private equity of large businesses will become par for the course , as it is in other markets. 

Out of the 14 companies that you have across different industries, PeopleStrong was the first HR tech firm that you invested in. What was the thought behind looking at this segment?

The first thing is that we loved PeopleStrong’s team and for us it is more about supporting capable people. We were also very sure of the governance of the company and their product’s strength. Having ascertained these two points, we looked at the macro opportunity. We appreciated the fact they were getting into the SaaS business, which would open up a much broader segment of the market. And given that technology is a big disruptor and that HR is a critical function in every entity, we felt that the potential of this business hasn’t been harnessed — it is close to its inflection point, which is what excited us. Great people, great product, very well governed company, hidden in the market but growing well.

There is no secret sauce, except creating an environment where good people want to come and work. Multiples is a sought-after organization for most professionals because they can professionally enrich themselves that they will be given the space, the freedom. Investing is a knowledge business – people business, competencies, acumen and harnessing the people and products where you invest into. Hence creating the framework for a successful investment journey is important. My role as a leader is to guide the team in achieving this with the least set-backs or accidents – and the team is richer with this experience and iterative process. Multiples is a high achieving PE Platform which will succeed with a collaborative functioning. 

You meet new businesses, entrepreneurs, opportunities, and you are constantly in a new environment. And I am very conscious of this.  Although there are certain constructs — what should be the terms and conditions, how do we engage with a company, how do we decode an entrepreneur, what are the facets of the entrepreneur we want to understand, all of these are codified in the company and has been built from our experience. But in today’s context, when you meet a new company in a new industry and look at what can happen in the next 10 years, you can’t put a framework around it. So it comes from imagining the possibility of a new opportunity. 

I encourage everybody to collaborate freely. It is an integral part of our organizational culture too. Everyone gets an opportunity to be a part of a decision and also give inputs. At Multiples, we don’t make any investment unless the entire investment committee says “Yes” (with excitement).