GQG Partners likely to step up investment in Adani group, says founder

By Praveen Menon and Lewis Jackson

SYDNEY (Reuters) -GQG Partners would likely expand its investment in the Adani group, the fund firm’s founder Rajiv Jain said on Wednesday, a week after its $1.9 billion infusion into the embattled Indian conglomerate.

“Chances are we’ll probably buy more because we typically initiate a position and then depending on how things go and how the earnings come through we tend to get it to full size because we’re not at full size at this point,” Jain said on a call with journalists in Sydney.

GQG Partners, co-founded by Jain in 2016, bought shares worth $1.87 billion in four Adani group companies, marking the first major investment in the Indian conglomerate since a short-seller’s critical report in January sparked a stock rout.

Jain, based in Florida, flew to Australia this week for talks with investors, which include some of Australia’s largest pension funds. Last week, pension fund investor Cbus Super, with A$71 billion ($46.82 billion) under management, told Reuters they had queried GQG about the Adani purchase.

A GQG spokesperson said Jain’s trip had been planned for some time and the discussions included topics other than Adani.

“The response actually has been, frankly, more positive than I would have anticipated because they feel that’s how we differentiate ourselves,” Jain said, when asked how the clients have responded to the Adani deal.

“We do our deep dive, and we don’t follow the herd,” he said.

Jain said he has not had a conversation with the Adani group since the transaction because “there is nothing to talk about”.

“We feel that we got an incredible opportunity to initiate positions and over time, the size will increase and most likely will increase depending on the price and how they deliver…,” he said.

Esg targets

New York-based short-seller Hindenburg Research accused the Adani group in a Jan. 24 report of stock manipulation and improper use of offshore tax havens that it said obscured the extent of Adani family stock ownership in group firms. The group has denied the charges.

The allegations resulted in seven of the Indian group’s listed firms losing about $130 billion in market value, and the group also shelved a $2.5 billion share sale.

Adani has major coal assets, which could affect the environmental, social and governance (ESG) targets of superannuation and other Australian investors.

Jain said he agrees on the long-term energy transition but fossil fuel cannot be shut off now.

“It’s a more convenient issue rather than a substantive issue. A lot of people simply do box checking exercise. We feel that you need to make the transition, but the transition has to be based on some realistic aspects,” he said.

($1 = 1.5163 Australian dollars)

($1 = 82.1300 Indian rupees)

(Reporting by Praveen Menon and Lewis Jackson; Editing by Muralikumar Anantharaman)