How Xander survived the crash and burn story of PE firms

Despite keeping a low profile, US-based investment firm Xander Group,which has over Rs 10,000 crore of capital under management in real estate and infrastructure, has stood its ground India while most other foreign PE firms have crashed and burned.

The tried and tested theory of investing when the market is too hot to handle led to the demise of several global fund managers in India thateither lost capital for their investors, or failed to generate meaningful returns from assets, but Xander continued to become more visible ever since it entered India in 2005.

Today it is one of the top two realty funds in India.

[caption id=“attachment_518938” align=“alignleft” width=“380”]  Xander says its investments are opportunistic[/caption]

Backed by investors from the Rothschild family, RIT Capital, the Getty Family Trusts and Harvard Business School professor Arthur I Segel, the key to the firm’s success is a long-term investment perspective, rather than the three- to four-year horizon like most other PE funds who have now been unable to deliver promised returns to investment.

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So what sets Xander apart?

Xander says its investments are opportunistic, reports the Business Standard.

Unlike investments in core markets like residential, office, IT or retail, Xander’s investments straddle all segments and prefers retail properties and hotels, which are not the hot favorites of investors , given the current slowdown. The firm tries to find opportunities that may be more complex or simply ignored by others.

Secondly, being cash-rich, the firm has an edge over its peers. It would rather put money in fixed-return deals rather than high yielding coupons.

And thirdly, doing actual homework on the kind of investment, which really pays off.

Analysing fundamentals rather than betting on leverage and growth to generate returns has paid off for the company, which has direct or indirect investments in 25 companies.

Siddharth Yog, managing partner of Xander Group, sums it up.

“We are not growth investors. Rather, we are value investors. As a result, whether the market is slowing or heating, we are always looking for opportunities where we believe there is a mismatch between the fundamental base value and the market price,” he said in an interview with the Business Standard.