KKR responds to demand for 'value add' in Asia

Kohlberg Kravis Roberts has appointed Akhil Puri as India director for KKR Capstone, the firm’s operational team, the New York-based firm said in a statement. 

Puri had been a member of the operating team at TPG Capital, where he supported operational efforts across multiple portfolio companies in Indonesia, China, Singapore, Japan and India since 2008, according to the statement. 

The hire comes at a time when key Asian markets are heading towards a survival of the fittest scenario, according to industry sources. 

“The more established GPs are likely to be more operationally focused. Some GPs will disappear, the survivors will be the ones that have the foresight to build operational capability when they don’t have to,” said one Hong Kong-based GP in a recent interview.

However, with both China and India still growing apace and attracting the attentions – and capital – of increasing numbers of LPs, that day of reckoning may still be some time off.

In the meantime, a final incentive for growth-focused GPs to up their game and move to a more traditional, longer-term and operationally hands-on approach to private equity has been LP pressure.

“Three years ago many first-time funds raised money without some box-checking elements. But LPs have more expectations today – they are asking whether GPs have delivered,” according to one China-based LP in a separate interview. 

He explained that when LPs talk about “delivering”, they want to see managers capable of producing “alpha” – or more specifically, outperformance due to real value creation at the portfolio company level as opposed to returns that were derived from financial engineering or a bull market.

Puri's most recent assignment for TPG was vice president of Indonesia’s second-biggest coal mining contractor, BUMA, which is owned by Delta Dunia, a TPG investment.

Prior to TPG, Puri held various leadership positions at General Motors in Detroit and in Shanghai. He also worked at at Hindustan Unilever in India, serving in various leadership roles in manufacturing and project management.  

In India, where operational work is increasingly in demand, entrepreneurs are looking for transformative expertise from private equity firms rather than just money, Sanjay Nayar, head of KKR in India, told sister title PE Asia earlier. 

India's slowing growth is forcing entrepreneurs to seek advice about sales force effectiveness, supply chains and good management teams from private equity firms.

“You’ve got to stay available and these companies are beginning to invite you in. That phenomenon has increased in the last one-and-a-half years,” Nayar said.

In India, KKR Capstone is currently working with Dalmia Cement and supporting Go Daddy’s business expansion into the country. 

KKR has about $17 billion invested in India. The firm has 17 professionals based in Mumbai, focusing both on private equity and non-banking financial services.