Decoding feasibility of Investment in India: Insights from Global Investment Experts

Warren Buffet once said: “Risk comes from not knowing what you are doing.”

George Molakal and Boris G. Tsimerinov are two global investment experts who share the same philosophy. These fine gentlemen are Harvard Business School alumni, expert private equity investors and venture capitalists, and are proficient at managing multimillion dollar cross-continental investments. Molakal is the CEO of Alcor Fund and Tsimerinov is the CEO & Managing Director of Semper8 Capital.

As they are set to expand their investment in India, they have taken great effort to evaluate their existing experience in India and other lower-middle income economies, conduct research and proactively engage with some of the country’s leaders to better understand the current investment climate, opportunities and risks.

Molakal and Tsimerinov recently spoke in New Delhi at the 3,000+ person Global Partnership Summit among other esteemed business people, politicians and scientists from India, Japan, Africa, the Middle East and the United States.

It was evident that Molakal and Tsimerinov were keenly engaged in sharing their wisdom, but also learning from a dynamic gathering of thought leaders and decision-makers. Tsimerinov said: “Keynotes and panels bring lots of information, but behind the scenes discussions at conferences create most value through relationship building, initiating deals and sharing private insights”. Molakal said: “Business is ultimately about choosing the right people as partners, collaborators or employees, inspiring and enabling them to perform.” Both agreed that doing business in India requires lots of local knowledge.

Choosing India as an investment destination, it was clear they had analyzed various macro-economic factors and contrasted the same with other emerging economies. As part of his keynote, Molakal comfortably sighted the Indian pollution statistics and their impact. Tsimerinov was able to easily compare Indian urbanization and demographics data with other jurisdictions in his comments on panels at the Summit. Both were specific and precise in their responses to audience questions.

Tsimerinov and Molakal strongly believe that India, growing GDP at upwards of 6.5% annually, as one of the fastest growing economies can be a good location for investment. Molakal mentioned that India offers cheap skilled labor coupled with relatively low land and capital costs. Tsimerinov sighted the opportunity and need to tackle recognized infrastructure, environmental and societal challenges. The investors were excited about Prime Minister Narendra Modi’s, Minister Nitin Gadkari’s and NITI Aayog CEO Amitabh Kant’s recent comments on pending reduction in emissions, build-up of infrastructure and India moving to electric vehicles by 2030. “It always helps a new investment thesis when the industry trends and government policy are in favour of a target sector” they mentioned.

In speaking about opportunities, Molakal and Tsimerinov also recognized that lower-middle income countries often present unique challenges and risks to international investors. They talked about, generally, higher levels of corruption, frequency of changes in government policy and productivity of labour as some of the issues they’ve experienced in such countries in the past. While they did not point to these as the sources of risk in India, it was clear that their excitement about any market is always mixed with a healthy dose of analytical skepticism.

We learnt that Molakal and Tsimerinov have international interests in a wide range of industries ranging from manufacturing, engineering services and investment banking to healthcare, technology and education. In India, they are open to evaluating sizable opportunities in those same sectors, and more particularly, their sights are set on the emerging ecosystem surrounding renewable energy generation, smart cities and electric vehicles. We were inspired by the investors’ passion for opportunities, thoughtful pursuit of knowledge to understand risks and desire to help solve India’s environmental challenges with their investments. We wish them luck!