Sumir Chadha on Sequoia split, WestBridge vision

For a veteran investor like Sumir Chadha, who has over a decade experience of investing into the Indian private equity markets, this spin out from Sequoia Capital to build a public markets investment firm from ground up was not a sudden move. "It was well thought out," says Chadha who is bringing Westbridge back into the game with a focus on public markets. Westbridge, founded in 2000, merged with Sequoia Capital in May 2006. The new Westbridge will bear a huge semblance to a hedge fund taking passive positions in public listed stocks. Chadha is also confident that they should at least be able to raise $200 million by year end for public equity investing. In an interview with VCCircle, Chadha talks about the vision for Westbridge, public market focus and the transition from Sequoia. Excerpts:-

Was this spin-out well-timed? What was the rationale behind the move?

Yes, I think it was well thought out and planned. Sequoia India has been doing public investments for over three years now but it forms a small part of its portfolio. The four founding members KP Balaraj, Sandeep Singhal,  SK Jain and I have been involved in this for three years and now we want to move on to something which we enjoy doing the most - which is public investing. Sequoia is very focussed on private investing and we want to focus very much on public investing. We did this transition in a very amicable, thought out way. We have been thinking over it for some time but the actual decision was made very recently and we announced it to everyone as soon as we made it, to be very open and transparent about everything.     

What was the trigger point?

There is no magical or perfect timing for these kinds of decisions. What is nice about this is that while we have parted, we remain on boards of some 20 plus companies from the portfolio of Seqouia/Westbridge. (Westbridge, founded in 2000, had raised two funds before merging with Sequoia Capital in May 2006.) We have been specifically asked to do this by our clients to make sure that we successfully swift the investments that we have made over the past three years through meaningful exits. What is also nice is that we continue to maintain good relationship with Sequoia Capital. There is a lot of course collaboration going forward but clearly we are going to invest in different spheres - with Seqouia having a private market focus and we doing public investing.

How are LPs reacting to this kind of senior management transition?

I just spoke to the LPs this morning in the US.  Any kind of transition, as you can imagine, raises a lot of questions but the way it has to be done is very partner-like, very amicably and smoothly. I think the clients will be fine as there is a very strong and experienced team running the show and Sequoia will continue to be the dominant venture and growth investing firm in India going forward.

Do you think public equities are more attractive than private equities from a risk-return perspective?

I think there is some truth in this. If you talk to some key guys in the industry who have been around for some time and made money, they will tell you that public investing is generally more attractive than late stage private investing. But clients don