New Delhi, June 9 -- Japanese conglomerate Marubeni Corporation, which has so far made real estate investments from its proprietary book in the country, has set up a consumer-focussed platform in India, seeking to tap the growth of the sector in the mid to long term.

The conglomerate has set up Marubeni Consumer Platform India (MCPI) as a company to house private-equity style investments and has appointed Ashish Bhargava to lead the platform.

Bhargava has over twenty-five years of experience across consumer space and private equity. He kicked off his career with Marico, working for the consumer firm for over ten years. He has also worked with India Value Fund and True North in the private equity space. As per his LinkedIn profile, he is currently the founding partner of Galactica Advisors LLP which advises businesses.

People close to the development told VCCircle that Bhargava was hired two months back to lead the platform in India. "The firm is currently hiring people to build a team and giving final shape to its strategy and vision before it hits the market for investments. While a few key members, including the leader of the platform, has been hired, a few executives will be brought onboard to give final shape to the team," one of the people mentioned above said.

Investing strategy

The investing strategy of the consumer-platform will mostly be to buy significant minority stakes across companies in sectors such as personal care, quick service restaurant (QSR), consumer apparel and beverages. "It has selected nine sectors out of the 21 broader consumer themes. It aims to take exposure in a small company with strong potential and grow it big, possibly into a market leader in its category," a second person familiar with the plans of the company told VCCircle.

Both the sources added that while the platform is taking final shape, it is simultaneously evaluating deals and keeping a close watch on key target companies in the sector. The firm is yet is seal its maiden deal though.

Marubeni will deploy its balance sheet capital through the platform. While it will operate like a private equity firm, its exit will have no definite timeline and will not be defined by the lifecycle of a fund structure. "Also, there is no specific limit to the capital allocation per deal, the allocation will depend on each deal and any deal size is possible if it suits the parameters of Marubeni," the second person said.

Consumer-sector opportunity

In a recent statement, the company said that India has the world's largest population, exceeding 1.4 billion people, with approximately 26 per cent aged between 10 to 24 years. "As a result, the country's working-age population is expected to continue expanding in the coming years. India is also one of the world's fastest-growing countries, with annual GDP growth exceeding 7 per cent. Against the backdrop of rising disposable income associated with economic growth, expanding private consumption, and the rapid adoption of digital payments and e-commerce, the consumer sector is expected to achieve strong mid- to long-term growth both in scale and diversity," it said.

Marubeni's consumer platform is part of its Next Generation Corporate Development Division which aims to build businesses that will become new revenue pillars for Marubeni by 2030 through investments and M&A in consumer-related businesses.

Under the platform, it has established Marubeni Consumer Platform in Singapore, the United States and Japan, through which seven investments and acquisitions have been completed to date. India is the latest addition in its strategy for consumer play.

"Going forward, Marubeni will promote investments and M&A across four regions, including India, with the aim of achieving growth together with its investees and enhancing corporate value," it said in the statement.

In consumer-related businesses operated through the Marubeni Consumer Platform, Marubeni aims to accumulate strategic investments totaling JPY 250 billion (around $1.6 billion) across the four regions by FY27 and to create multiple strategic platform businesses achieving ROIC exceeding 10% by approximately FY30.

Apart from its bets on the consumer sector, Marubeni has exposure in India's real estate market through two strategies: one is of investing from its prop book and the other is its recent expansion into an AIF strategy.

Marubeni is also separately developing an industrial park in Telangana in partnership with the local government.

Published by HT Digital Content Services with permission from VC Circle.