Prem Watsa To Set Up $1 Billion India-Focused Fund

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Prem Watsa, the chairman and CEO of Fairfax Financial Holdings Ltd (OTCMKTS:FRFHF) (TSE:FFH), recently sat down for an interview with the Times of India to discuss his new $1 billion venture fund focused on India. Hyderabad-born Prem Watsa is sometimes called the “Canadian Warren Buffett”. In the interview, Watsa details his views on India and his plans for the new India venture fund.

Get in on India growth story

Prem Watsa’s new India-focused fund is really a bet on the economic growth he expects to see in the country over the next few years. He says: “We need to open India and the economy up and let people come. I see unlimited opportunity. Education will be huge in India, we need more education.” In terms of specifics, Watsa went on to say “We believe India is going to have economic growth in excess of 10%,” although he did not provide a time frame.

New India fund will invest in all sectors

The new fund is looking to invest in businesses across a broad range of sectors of the Indian economy. When asked what types of companies he was looking at, Watsa replied: “Good businesses, with good, ethical and honest leadership, good track record and we helped them in their acquisition IKYA, Sterling Resorts, helped them grow, expand. So, it is not any specific sector, it has to be ethical management, honest management, strong track record and leadership that does not want to sell and retire, wants to build. We will back these types of businesses.”

Prem Watsa specifically noted the fund is not limited to specific sectors. “We are keeping it broad. We are keeping it open. It could be infrastructure, could be companies, public companies, private companies. Smaller companies as opposed to bigger companies which will grow and provide services to the average Indian.”

He provided a little further guidance when he said: “We won’t get into commodity businesses like steel, copper that’s not our expertise but anything on the service side we will get in.”

Watsa fund will avoid eCommerce

When asked about investing in eCommerce businesses, Prem Watsa said no, highlighting current high valuations and lack of expertise. “We don’t think our expertise is in that area. There’s lots of opportunity but that’s not our expertise. Our expertise is brick and mortar services, travel services, human resource services through IKYA, resorts and all that.

Prem Watsa had no comment on insider trading allegations

When the interviewer asked about recent insider trading allegations against Fairfax by Canadian regulators, Prem Watsa replied; “Unfortunately, I cannot comment more than we already have in our public filings. We continue to believe we have done no wrong and we are fully cooperating with the Quebec securities regulator.

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