The two senior executives of Red Fort Capital, the New Delhi-based private equity real estate firm behind about $1.2 billion of institutional equity investment in India, have signed an agreement that sees them part ways.
PERE has learned that Parry Singh and Subhash Bedi, who have worked together for 17 years and who co-founded Red Fort more than a decade ago, have signed an agreement that effectively sees Singh maintain the company’s brand and Bedi assume control of the two opportunity funds it raised.
In terms of ownership, it is understood that Singh will remain an equity holder in the investment management entity responsible for the funds and that he will benefit from their future carried interest. However, the controls and decision-making regarding their assets will reside with Bedi.
According to sources familiar with the situation, the two partners have separated as a result of strategic differences of opinion and for personal reasons, however, they remain on cordial and respectful terms.
Going forward, Bedi will lead a new private equity real estate business called Rising Straits Capital from an office in Singapore.
Rising Straits, which has a team of staff that transferred over from Red Fort, will assist Bedi in managing out the funds, which are called Red Fort India Real Estate Fund I and Red Fort India Real Estate Fund II.
Parry, meanwhile, is expected to pursue a REIT strategy through which he plans for Red Fort Capital to make future equity investments. The firm also controls a non-banking finance company which issues loans to real estate borrowers in India.
The separation of Singh and Bedi has been on the cards for some time. In January, PERE obtained and reported on a note sent to Red Fort’s investors responding to increasing speculation in the Indian market about a rift between them and a negative fallout for the business. The note was an effort to dispel negative speculation about the firm and suggestions that the funds’ assets would be adversely affected. However, it did allude to their separation.
Today, both Bedi and Singh have plans to raise further commingled investment funds, however these are not thought to be part of either man’s near-term strategy.
Red Fort India Real Estate Fund I attracted $375 million in 2010, while Fund II attracted $500 million at the end of 2011. Further equity was raised via side-car vehicles. Between the funds, they contain 26 investments situated across India. Some are office investments, others are residential investments and there is one mixed-use project too.
Investors across the two funds include the Abu Dhabi Investment Authority, the Qatar Investment Authority, New York State Common Retirement Fund and multi-managers Franklin Templeton and Partners Group.
Neither Singh nor Bedi would comment.