Singapore Hedge Fund

Alternative asset management in Singapore

Singapore-based hedge fund, Nalanda Capital, is said to be offloading its stake in outsourcing firm WNS Global Services.

From The Economic Times in India, news that a Singapore-based hedge fund, Nalanda Capital is said to be following private equity firm, Warburg Pincus in offloading its stake in outsourcing firm WNS Global Services.

A person familiar with the development told The Economic Times in India that Nalanda Capital has put its 12.3% in WNS on the block. The person requested anonymity as he is not authorised to talk to the media.  This comes a day after ET reported that PE firm Warburg Pincus has held initial talks to offload its 50.12% in WNS for an exit amount of $400 million. The transaction would value the BPO at $800 million.

While Merrill Lynch is believed to be advising Warburg on the stake sale, sources said Nalanda hasn’t appointed a banker but would just go with the seller that Warburg identifies. Since it owns less than a fifth in WNS, Nalanda would have lesser bargaining powers when it comes to price. Sources also said that apart from private equity firms such as Blackstone, Nasdaq-listed IT firm Cognizant is a likely suitor for WNS and will shortly kick off the due diligence process.

Considering that Nalanda Capital picked up a stake in WNS only last year, it wasn’t immediately clear why Nalanda Capital is selling its stake in the firm. “Nalanda Capital is structured like a hedge fund, so it does not have any long-term obligations to stay invested. Also, it will be the right time to exit as they would make a profit,” said an official from the private equity industry, who did not wish to be named.

It is pretty active in the open market and has bought shares in Mastek Global, Carborundrum Universal, Triveni Engineering, Kirloskar Engines Sun TV and Mindtree. Nalanda typically buys shares in multiple lots and tends to pick up 7-8% in any company they invest in.  The hedge fund initially picked up 5.25% in WNS last March and has upped its stake over the last year to become WNS’ third-biggest shareholder with 12.3%. While Warburg Pincus owns 50.44%, the second-biggest is Fidelity Management & Research with 12.37%.

The Economic Times

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