Dubai venture firm targets India’s health and education sectors

Abhishek Sharma, chief executive of Foundation Holdings.
Updated 07 March 2018
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Dubai venture firm targets India’s health and education sectors

DUBAI: Dubai-based global investment firm Foundation Holdings will invest millions of dollars in India as wealthy investors and companies in the Gulf tap into the increasingly lucrative emerging market.
The multi-family investment firm plans to spend $275 million in India’s health care, education and consumer sectors. This is around half the company’s total planned investment of $550 million globally over the next five years, according to chief executive Abhishek Sharma.
Low interest rates and easy access to capital pushed the disclosed deal value in private equities in India to $24.4 billion in 2017, up from $19.3 billion in 2015 and $15.4 billion in 2016, according to a report from research company Venture Intelligence released in December. Health care was among the top five sectors, attracting investment of $1.3 billion, up 10 percent from the previous year.
“These industries are continuously witnessing demand and have strong government backing not only in India but also across the world,” Sharma said.
Foundation Holdings’ investors are mainly from the UAE and India, with family businesses and family offices the main backers.
“These sectors have a vast potential because India is consumer-driven,” said Gaurang Shah, head investment strategist at Geojit Financial Services in Mumbai. “(But) the working capital requirement is huge because (new entrants) need to penetrate new geographies and there is a long gestation period to break into profitability.”
Wealthy individuals and financial institutions in the Gulf have expanded their portfolios in India as ties between the two regions deepen.
High-profile visits have helped to cement the relationship. India’s Prime Minister Narendra Modi toured Saudi Arabia in 2016 and Sheikh Mohammed Bin Zayed Al-Nahyan, crown prince of Abu Dhabi, visited India in January this year.
In September last year, Dubai-based private equity firm Abraaj Group announced it would develop a wind-power platform in India in partnership with French gas and power company Engie. India’s ambitious renewable energy program has a target of 175 gigawatts of operational renewable energy capacity by March 2022.
Abraaj and Engie said their wind-power projects could account for 1 gigawatts of power.
In December, the Abu Dhabi Investment Authority (Adia) and KKR India Financial Services (KIFS) signed a deal that made Adia a “significant minority shareholder” in KIFS, which runs an alternative credit business in India.
Foundation Holdings will invest in companies to prepare them for an IPO or find them a home on the FTSE 100, such as Al Noor Hospitals, or on the Dubai Financial Market, such as Amanat Holdings.
The firm’s latest investment, Dubai-based Right Health, was formed through the acquisition and integration of 31 medical and health-service providers to an IPO.
Annual foreign direct investment from the Gulf to India was $1.4 billion in 2016, a five-year growth rate of 41.2 percent, a report from Alpen Capital said last year. Total annual investment inflow to India was $44.4 billion in 2016, according to the United Nations Conference on Trade and Development.
However, India has not always been a happy hunting ground for investors from the Gulf. The UAE telecom major Etisalat wrote off $820 million in impairment charges in 2012.
“Investing in India comes with its set of challenges, like other countries,” Sharma said. “Some of these include certain state-level legislations, registration of documents and data privacy matters.”
He said Narendra Modi has done “a great job” in encouraging bilateral relations between the Gulf and India.


Intel CEO resigns after probe of relationship with employee

Krzanich led Intel as rival chipmakers ate away at its dominance in the technology over several decades and he also presided over a series of high-level executive departures. (AP)
Updated 58 min 41 sec ago
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Intel CEO resigns after probe of relationship with employee

  • Corporations are under increasing pressure to “walk the walk” on executive behavior with the rise of the #MeToo movement
  • The board named Chief Financial Officer Robert Swan as interim CEO

Intel Corp. Chief Executive Brian Krzanich resigned on Thursday after an investigation found he had a consensual relationship with an employee in breach of company policy.
The head of the largest US chipmaker is the latest in a line of men in business and politics to lose their jobs or resign over relationships viewed as inappropriate, a phenomenon highlighted by the #MeToo social media movement.
Krzanich led Intel as rival chipmakers ate away at its dominance in the technology over several decades and he also presided over a series of high-level executive departures.
The change in leadership comes as Intel expands beyond personal computers and servers into areas such as artificial intelligence and self-driving cars, where smaller competitors including Nvidia Corp. are strong. Qualcomm Inc. leads in the mobile chip market.
The board named Chief Financial Officer Robert Swan as interim CEO and said it has begun a search for a permanent CEO, including internal and external candidates.
“An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, which applies to all managers,” Intel said in a statement, declining to give any further information about the probe. Its shares fell 2.4 percent.
The company’s board was informed a week ago that Krzanich had a mutual relationship with an employee in his chain of command in the past, according to a source familiar with the matter who asked not to be named. The relationship began before Krzanich became CEO in 2013 and ended several years ago, the person said.

‘BK’ out
Krzanich, who did not have an employment contract, is entitled to a $38 million “walk-away” payment in the event of a voluntary termination, according to Intel’s regulatory filings.
Of that, $31 million is in the form of accelerated stock awards and $4.1 million in the form of deferred compensation, based on Intel’s share price on Dec. 29.
An Intel spokesman declined to say whether the walk-away payment applied to Krzanich’s resignation, but said the investigation into Krzanich’s conduct continued and that the board reserved the right to take further action.
Corporations are under increasing pressure to “walk the walk” on executive behavior with the rise of the #MeToo movement, said Ivan Feinseth, chief investment officer at Tigress Financial Partners.
In the last few months Martin Sorrell, founder of advertising giant WPP Plc, and casino mogul Steve Wynn of Wynn Resorts Ltd. resigned after accusations of impropriety. Wynn has denied the accusations and Sorrell has denied any wrongdoing.
Krzanich, 58, an engineer and Intel veteran known at the company as “BK,” was appointed CEO in May 2013. Intel shares more than doubled during his tenure as the company expanded into new markets.
He was recently credited with containing the fallout from the discovery of security flaws in the company’s chips that could allow hackers to steal data from computers, although his sale of much of his Intel stock before the flaws were disclosed to investors attracted some criticism.

Time for an outsider?
His temporary replacement, Robert Swan, has been Intel’s CFO since October 2016 and previously spent nine years as CFO of eBay Inc. Given his short tenure and lack of experience in manufacturing, he is not likely to be named permanent CEO, Cowen analyst Matthew Ramsay said.
While Intel dominates in processors for servers and data centers, global competitors are catching up with its manufacturing technology, said Bernstein analyst Stacy Rasgon.
“BK will go down in history as the CEO that let Intel’s process leadership advantage slip away,” he said, adding that a change at the top could bring in fresh ideas.
Kevin Cassidy, an analyst at Stifel, said that Intel would take the change in stride.
“Although we respect Krzanich’s efforts in redirecting Intel’s strategy from a computer-centric to a data-centric company, we view Intel as a process-driven company with a deep bench of CEO candidates that can continue to drive the corporate strategy,” he said.
In its 50-year history, Intel has never appointed a permanent CEO who did not come up through the company’s ranks.
But those ranks are thinner than they used to be, with prominent Intel executives such as former CFO and manufacturing chief Stacy Smith, former president Renee James, ex-architecture chief Dadi Perlmutter and Dianne Bryant, who headed the data center group, leaving in recent years.
Instead, Krzanich’s replacement could end up being one of the outsiders he brought into the company’s executive ranks, a sort of “insider outsider” such as Murthy Renduchintala, Intel’s chief engineering officer who joined Intel in 2015 after helping lead Qualcomm’s chip business.
“They’ve got some very good people they’ve brought in,” said Dan Hutcheson, CEO of VLSI Research Inc, who “know the company, know the new direction. It’s not a turnaround story.”
UBS analyst Tim Arcuri wrote to clients that “the door is open to hire from the outside.”
Intel on Thursday raised its second-quarter revenue and profit forecast, saying it expects quarterly revenue of about $16.9 billion and adjusted profit of about 99 cents per share, up from a previous forecast of $16.3 billion in revenue and adjusted earnings per share of 85 cents.
Analysts on average were expecting revenue of $16.29 billion and adjusted profit of 85 cents per share.
“There are no new payments as part of his departure,” a source familiar with the company told Reuters.