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July 06, 2005
TPG's New Partner
I spoke yesterday with Vivek Paul and Bill McGlashan of private equity firm Texas Pacific Group. Paul just quit his former post as CEO of Wipro Technologies, the Bangalore, India-based tech services company. He's been on the job at TPG for only a week, so he doesn't yet have a lot of concrete plans. But he's making this much clear: "I'm not going to be the India guy at TPG." Obviously, he has connections in India. And he'll work on deals for Newbridge Capital, TPG's Asian affiliate. But TPG already has its own Indian connections, and Paul is based in Silicon Valley. So, he'll mainly be a Valley guy.
That said, Paul has plenty of ideas about private equity investing in India. "More and more Indian companies are going global," he says. "So expansion capital is one thing we can provide. Second, as the domestic Indian economy continues to grow, there are opportunities in retail, financial, anything that serves the burgeoning middle class."
What about tech services? "It's difficult to create a Wipro today," Paul says. "That's become a more mature industry." But, as outsourcing spreads beyond high tech, TPG sees opportunities for services businesses in non-tech industries. The firm recently invested in Matrix Laboratories, a Hyderabad, India-based company that provides outsourced clinical and laboratory services to pharmaceutical companies.
Companies like Matrix provide much more than cheap workers. "Originally, companies went offshore to reduce the cost of labor," McGlashan says. "Now they're doing it to bring design and engineering closer to the supply chain. We're into a new phase of globalization today with the search being for the best talent and intellectual property."
In the Valley, Paul will hunt for deals in info tech and life sciences. Before joining Wipro, he earned his stripes in the medical field as CEO of General Electric's medical equipment joint venture with Wipro. So, medical device makers will be on his radar.
Why quit Wipro? Paul felt the company had achieved most of the goals it set out to achieve when he joined in 1999. Among tech firms, it's in the top 10 in brand, net income, and market cap. "I had to figure out whether to re-up for the next vision or do something different," he said. Something different won.
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