Abu Dhabi Investment Authority is investing $500 million in India’s Lenskart, an online retailer for eyewear, becoming one of the largest shareholders in the company.
Adia will make the investment through a purchase of both primary and secondary shares, the companies said on Thursday.
The investment is subject to securing statutory and regulatory approvals.
Before the latest transaction, Lenskart's investors included Temasek Holdings, TPG, KKR and SoftBank.
Lenskart will have attracted nearly $750 million of capital over the last 12 months including recent fund-raising activities, making it one of the largest such growth-stage financings globally, upon completion of the transaction. The latest funding round values Lenskart at $4.5 billion.
“Lenskart has rapidly established itself as one of the largest and most innovative eyewear companies globally,” said Hamad Al Dhaheri, executive director of Adia's private equities department.
“Given its unique technology-enabled and vertically integrated business model, we believe the company remains well positioned to build on its leadership position. This investment is a continuation of our strategy of investing in highly differentiated, market leading businesses in Asia linked to the region's consumption-driven growth and rapid technological advancement.”
Lenskart, founded by Peyush Bansal in 2010, sells eyeglasses, contact lenses and sunglasses online throughout India.
The company has expanded in Asia and the Middle East and now has more than 2,000 stores. Of these, 1,500 are in India and the rest are in South-East Asia and the Middle East.
“It is still Day 1 at Lenskart. Vision Correction remains a big problem, and Myopia rates continue to grow rapidly, touching levels of as high as 80-90 per cent in some parts of Asia,” said Mr Bansal, chief executive of Lenskart.
“Hence, we are still very early in our journey and have a lot of work to do to continue to make our desired impact in this area of critical need. And Adia, with its patient and long-term approach to investing, is a perfect partner for us as we embark on the next phase of our journey.”
Lenskart said a new factory it plans to launch soon, will play a significant role in manufacturing the 20 million pairs of eyewear that it aims to ship next year.
The company grew revenue by 60 per cent for the second year in a row and is now profitable.
“The next phase at Lenskart is a journey of 10 to 100 where we are focusing on building a diverse culture that enables innovation and execution at scale while solving a large bottleneck hindering high quality vision for all,” said Mr Bansal.
Avendus Capital acted as the exclusive financial adviser to Lenskart and its shareholders on the transaction.
EY advised Adia on accounting and tax matters in the transaction, while AZB & Partners and Allen & Overy were its legal advisers.
KPMG and PwC advised Lenskart on accounting and tax for the deal, while Rajaram Legal & Khaitan & Co were its legal advisers.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
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Muslim Council of Elders condemns terrorism on religious sites
The Muslim Council of Elders has strongly condemned the criminal attacks on religious sites in Britain.
It firmly rejected “acts of terrorism, which constitute a flagrant violation of the sanctity of houses of worship”.
“Attacking places of worship is a form of terrorism and extremism that threatens peace and stability within societies,” it said.
The council also warned against the rise of hate speech, racism, extremism and Islamophobia. It urged the international community to join efforts to promote tolerance and peaceful coexistence.
