No matter what the age, investment is a necessary part of planning the future. Some start investing from an early age while some a little late in their 30s. But it has now become an inevitable part of everyone’s lives. Even with a continuously increasing array of options available to invest, a product which offers balanced return combining the elements of fixed return and equity upside along with comprehensive risk management to ensure safety of principal remains one of the most attractive options because of its obvious benefits.
Featuring for the Cover Story of The Business Fame’s issue of “The Most Innovative Buyout PE Fund of 2022 Focusing on Margin Expansion Strategy in Portfolio Management” is TIW Private Equity, an India Buyout Fund, under the umbrella of TIW Capital Group (TCG). TIW has innovated on the return characteristics of a typical Buyout Fund by adding a fixed return component, which gives a quarterly payout to investors in addition to the equity upside. This returns framework of TIW converts the characteristics from a pure equity Fund to that of a balanced Fund, offering greater stability of return, early liquidity, and a cushion against adverse macroeconomic events. TCG has now also come up with a Fixed Return Fund which strips off the equity risk of its Buyout Funds and offers a better fixed yield than most of the other comparable options available to investors along with TIW’s multi decade experience and expertise of comprehensive risk management.
The Managing Partner, TIW Capital Group (TCG)
As a firm, TCG has focused their investments in both the Buyout space in South Asia, as well as globally through the Fixed Return-Fixed Maturity product for their international investors. Using their proprietary FRICT™ strategy*, TCG has been consistently giving returns to their investors across multiple funds over the years. TCG intends to expand the portfolio and their investor base in a structured manner over time and will ensure that they continue to offer the best-in-class financial products and services that a Global Asset Management Company offers to its clients. TCG currently have presence in Singapore, Dubai & India.
Led by Mr. Mohit Ralhan, TCG has helped numerous entrepreneurs to build a better future and create significant returns for its investors. Mr. Ralhan has a professional career spanning across Two Decades, Six Funds and Multiple Businesses. He has invested circa SGD 250 Mn in Companies with specialization in “Margin Expansion” & “Turnaround Situations” with ‘Zero %’ Loss Ratio at Fund level on Principal amount. He has also demonstrated repeated success in Investment Judgement, Fund Management, Portfolio Management and Business Strategy.
He has an exceptional Communication, Presentation & Mentoring Skills with distinguished abilities in leading teams for developing service standards for investment outcome. He is responsible for all investment and divestment decisions made at TIW along with its strategic direction. In a career spanning two decades, he invested and guided Companies across multiple sectors. Mr. Ralhan has served on the Advisory Board of Companies in the interest-rate sensitive sectors, FMCG, Technology, Education, Consumption, Media, Digital Businesses, Real Estate & Manufacturing Consumption. Additionally, he has served on Investment Committee of multiple Funds managed by TIW.
Mr. Mohit Ralhan’s Accolades:
- Awarded by The Economic Times as the “Most Promising Business Leaders of Asia” for recent 2 consecutive years in 2019 & 2020
- Recognized by the CEO Insights Magazine as one of the ‘Top 10 Best Chief Investment Officers in India” for recent 2 consecutive years in 2020 & 2021
TIW has recently won Two Awards in the Global Brands Awards 2021 by Global Brands Magazine, UK in the categories of “Most Innovative Private Equity Buyout Fund” and “Excellence in Sustainable Turnaround Investments”. TIW was awarded this honour for its exceptional commitment to Innovation, Quality, Customer Service & Performance and providing a Robust Investment System in India.
*FRICT™ represents the core sectors where TCG believes there is a “positive friction” to generate alpha returns for its investors. These sectors include Financial services, Real estate, Internet-enabled businesses, Consumer goods and Technology services. TCG’s investment strategy is to find inefficient companies in these sectors that can generate positive ROE and free cash at an aggregate level, by ensuring that there is a significant scope of margin expansion basis the strong underlying macros to support demand growth.
Some Remarkable Moments of this Amazing Journey
In the trying times, human side of the business must come out. Businesses can’t be built purely on principles of capitalism. The principles of capitalism prioritize shareholders over all other stakeholders, which I believe is not good for the businesses in the long run. As perpetual entities, businesses must focus on sustainability. We have driven our businesses to be a responsible contributor to society both as a problem solver through its products & services and as an employment creator focusing heavily on employment sustenance. We also consistently work towards making our companies profitable and cash flow positive through our margin expansion strategies, which is critical for long term sustenance of the company itself.
“Our investment and operating expertise are focused on turning around Companies, which invariably saves employment not only directly but also indirectly.”
TIW takes a lot of pride in the fact that even during the pandemic period, we were able to sustain employment at our portfolio companies in spite of the challenging environment. Sustaining employment is an excellent way to contribute towards nation building and most memorable moments in this journey.
The Market Differentiators
TIW PE is a Margin Expansion–driven Buyout Fund. Leveraging its team’s multiple decades of investing and operating experience, it does the role of operating consultant and partners with entrepreneurs to significantly enhance margin profile of portfolio companies. They focus on situations where free cash flows can quickly become positive. They also believe in quarterly payout as a significant driver of returns. One of the rules that TIW strongly believes is that the companies should have Zero debt. This improves the outcome of the businesses and increases its ability to withstand macroeconomic disruptions like the one the world witnessed in 2020 due to the outbreak of COVID-19 pandemic. This has helped TIW’s portfolio companies to survive recessionary environments and steer employment sustenance.
“The value of a Fund manager is in bad times and the superior performance in such times sets our Fund apart”, said Mr. Ralhan.
The Road Ahead
Today we are managing Multi Asset, Multi Geography Buyout and Fixed Return Funds with an investor spread from 25 countries. Our specialization in “Margin Expansion” & “Turnaround Situations” creates unique value proposition for both investors and entrepreneurs. Our plan is to expand our operations globally, especially focusing to build local presence in our core markets such as Southeast Asia, Middle East, and Africa.
Mr. Ralhan’s Message to the Budding Entrepreneurs
I’m a strong believer of Zero debt. Our focus is to keep the liquidity high in each of our portfolio company, through creation of alternate revenue streams and rationalizing non-people costs. We are very clear that people are assets and therefore all cost measures should be taken on the non-people front, with greater focus on creating alternate streams of revenue. It prepares companies to not only tide over any macro-economic shock such as the one brought upon by the COVID pandemic but also consistently keep them on the path of creating competitive advantage and business moat. In our portfolio companies, we created sustainable online business opportunities from scratch, launched new offerings, innovated on distribution networks, and built remote sales & services channels. Each one of these initiatives have now become an integral part of the business, which probably, we would not have thought of otherwise. We recently invested in a company which manufactures, distributes, and markets men’s everyday wear products and has built a solid brand over the years. We embarked upon the path of complete deleveraging as soon as we invested along with pivoting the business towards a digital first model. It is aligned with the brands focus on younger demographics. One of our portfolio companies is in personal care space, where it manufactures, and markets products and brands backed by top celebrities. It has been extremely nimble in launching new products and even during the pandemic period it continued to innovate on new formulations and product offerings. It also expanded its distribution network with digital at the center of it. The critical point is that companies are like living organisms and they need to learn, adapt, and incrementally improve every day.
Visit us: www.tiwcg.com
