As fancy hotel suites go, the one at the end of the corridor east to the bank of cramped elevators on the first floor of Oberoi Hotel in south-central Delhi, is nothing to write home about. It's 2,000 sq ft of cavernous real estate with wall-to-wall carpets and Mughal paintings, and a narrow corridor that has rooms on either side. Walk into the first room to the corridor's left, and you'll find a small workstation hugging one corner, a large three-piece sofa with green leather upholstery sitting not too far away, near a large quasi-French window. There are two untitled paintings on the wall behind the workstation, one of which is hung above a shelf cluttered with files and documents. On the whole, a rather unpretentious and functional pad.

Just like its occupant, you could say, who on this day is wearing khaki-coloured trousers, an open-collared blue shirt, and a pair of well-worn burgundy moccasins. On the wrist of his left hand is a five-year-old plastic Swatch and the oval metal-rimmed spectacles that he is wearing has its left side temple bent-a fact unnoticed by the wearer until pointed out. Next day, when he turns up for an evening photo shoot, he does so wearing an 11-year-old tie, albeit a Hermes (you see it in the photo alongside). "I haven't bought a suit in the last five years," he informs the writer, not as a matter of pride, but fact.

That's one more thing global investors must love about Ashish Dhawan, the 35-year-old Senior Managing Director of ChrysCapital, and who calls Suite 101 in Oberoi his headquarters. Five years ago, he and his class mate at the Harvard Business School, Raj Kondur, gave up lucrative Wall Street jobs to launch an India-specific fund under ChrysCapital (formerly Chrysalis Capital), to invest in start-ups. Since then, Dhawan has raised, in two rounds, $200 million in funds from investors around the world, and on June 11 closed another, vastly bigger fund of $220 million (a greenshoe option included, it will eventually close at $250 million in July). That means Dhawan, the elder of two sons of a reasonably well off but retired corporate executive, is the keeper of $450 million of money from global investors, including the Harvard Foundation, Digital Century (a hedge fund), HSBC and Microsoft, among others. Says a Delhi-based private equity investor, who is currently doing the rounds of international investor circuit to raise a fund of his own: "For American investors (investing in private equity funds), India starts and ends with Ashish Dhawan."

THE MAN AND THE INVESTOR

First and foremost, Ashish Dhawan is a family man. He came back to India to get married to an Indian girl because he believed that was the right thing to do in the long run. He moved headquarters from Mumbai to Delhi and took up a suite in Oberoi because he wanted to be close to his family. Currently, he lives with his parents in their home in Delhi's Jor Bagh, but will be moving out to his own nearby that he bought recently. Last week of May, when he went to a fortnight-long vacation in China, he not only took his wife and two children, but also his parents. He's doesn't lead a page-three life, preferring quiet evenings with his family and, occasionally, a few select friends. A social drinker, he gave up red meat and turned to seafood after he went down with typhoid last year. Although he doesn't get to work out much, he likes to go skiing and scuba diving, which in India isn't all that often. As an investor, Dhawan believes in investing in a handful of industries where India has a chance of succeeding globally. "I hate commodity investments," he says when asked if he would invested in steel or cement. He also believes in letting the professionals in his investee companies run the show. Says Raman Roy of Wipro Spectramind: "He knows when to push and when to back off."

THE ESSENTIAL DHAWAN

BORN: March 11, 1969; Delhi EDUCATION: St. Xaviers Collegiate School, Kolkata; BS in applied mathematics and economics, Yale University; MBA, Harvard Business School WORK EX: Wasserstein Perella, July 1992-December 1993; McCown De Leeuw & Co., January 1994-June 1995; GP Investments (Brazil), Summer 1996; Goldman Sachs, July 1997- March 1999 RECENT ACQUISITION: A house on Delhi's tony Amrita Shergill Marg LIFE'S GOAL: To build world-class companies in India

No doubt, he's exaggerating for effect, but only a little. For, what Dhawan has managed to achieve in the private equity business is the near impossible. In an era when venture funds (the difference between private equity and venture funds is that while the latter invest in start-ups, the former fund listed or unlisted companies that already have sizeable revenues) were dominated by large financial institutions, Dhawan & Co. jumped in as fresh-faced kids with a naive conviction that they could a) get savvy investors to put millions of dollars behind them, b) sell them the India story (back in 1998-99 doing so was harder still), and c) actually make investments that would pay off. And incredibly, they've been right on all three counts. Says Prakash Karnik, an industry veteran: "In many ways, Ashish is a pioneer. He changed the rules of the game. For the first time in India, it was an individual, and not an institution, launching a venture fund."

For that reason alone, Dhawan-not necessarily the smartest of them all-is both the pride and envy of the industry. In less than five years, ChrysCapital, the first half of its name derived from Dhawan's school fest, has managed to return a 31 per cent IRR (annualised) for its Fund One, and make two highly profitable exits. One was the sale of Spectramind, a BPO, to Wipro, which fetched the firm $60 million and the other was the sale of half its stake in Jerry Rao's Mphasis to various institutions for $13 million. That was approximately the amount ChrysCapital had invested in it, and interestingly enough the other half of its stake is worth $30 million at current market valuation. The second fund, where investment has been made in companies like IVRCL and Yes Bank, is said to be running an IRR of 48 per cent, but even Dhawan admits that it will be impossible to maintain that when it's time to pay back to investors in 2006 or 2007. Still, depending on its exits, ChrysCapital should be one of the top performers in the secretive business of private equity. Says George E. McCown, Co-founder and Managing Director, McCown De Leeuw & Co. (MDC), a Menlo Park (California)-based private equity fund with $1.2 billion under management, and who gave Dhawan and Kondur part of the seed capital to launch ChrysCap: "They are probably among the top firms (in terms of returns) of that vintage." Possibly as a reward, the otherwise thrifty Dhawan has bought himself a house (the grapevine has it, for Rs 11 crore) on Delhi's upscale Amrita Shergill Marg, not far from where Bharti Tele-Ventures' Chairman Sunil Mittal lives in an even bigger and more expensive house.

DHAWAN'S A-TEAM
A winning combo: (Anti-clockwise from left) Brahmal Vasudevan, Adarsh Sarma, Kunal Shroff, Gulpreet Kohli; (centre, anti-clockwise) Ashish Dhawan, Ravi Bahl, Ashley Menezes and Sanjay Kukreja
Brahmal Vasudevan: A Sri Lankan Tamil who grew up in Malaysia and Britain, Brahmal went to Harvard with Dhawan and Kondur and has worked with BCG and BAT. Currently, he's a Managing Director in charge of US operations. Adarsh Sarma: A little over three years old at ChrysCap, Sarma has previously worked with Radiowave (a media and technology company funded by Warburg Pincus, Intel, and Motorola), McCown De Leeuw, and Merrill Lynch. He has an MBA from Chicago Graduate School of Business. Sanjay Kukreja: An economics graduate, he's done more than four years at ChrysCapital. He joined the firm fresh out of IIM Bangalore. Gulpreet Kohli: He worked with GE's BPO business before joining ChrysCapital in May 2000. Kohli has an MBA from Clark University. Kunal Shroff: He was hired even before ChrysCapital formally launched its fund in India. Kunal previously worked with Chilton Investment Company, a $2-billion hedge fund. At ChrysCap, Kunal, a graduate in computer science from Cornell University, focuses on tech investments. Ashley Menezes: A chartered accountant by education, Menezes came to ChrysCapital three years ago from KPMG, where he worked in the IT and US GAAP practices. Ravi Bahl: The oldest of the lot, Bahl, a Managing Director, joined three years ago and has worked with Citibank and eFunds, a transaction processing company. A graduate of IIM Calcutta, Bahl came on board soon after Kondur left.

Salesman #1

Talk to private equity players in India and they'll tell you that Dhawan's networking and money-raising skills are "light years ahead (that) of others". But the idea of a venture fund like ChrysCapital may actually have been fathered not by Dhawan, but by McCown. Here's how: About 10 years ago, when Dhawan had just passed out of Yale with an undergraduate degree in mathematics and economics and had taken up a job at McCown's firm as an analyst, Dhawan's father (Anand) happened to visit California and meet McCown. At that time, McCown was trying to raise a third fund for MDC and Dhawan senior suggested that he tap business families in India because recent liberalisation of the economy may have got them interested in markets abroad. McCown, an Indophile, came with his young Indian employee in tow, and went around meeting some of the big business families. As it turned out, the Birlas and the Tatas were more interested in investing in India than overseas. That got McCown thinking and he was keen to open an India office for his own firm. But Dhawan, only 25 years old back then, felt that they should wait for a few more years. McCown agreed.

At Harvard, the idea planted by McCown took shape when Dhawan and Kondur (besides class mate Sanjiv Bajaj of Bajaj Auto) started working on a case study on India (apparently, it is now taught at HBS). But instead of taking the plunge right away, Dhawan and Kondur decided to take up Wall Street jobs-Dhawan at Goldman Sachs as part of its $4-billion hedge fund business and Kondur at Morgan Stanley, where he was part of the team managing the $1-billion Princess Gate Fund, which invested in telecom and it. Ironically, the defining moment came with Dhawan's (arranged) marriage in July 1998. When he came to Delhi, he sensed that the time was ripe for launching an India fund. Returning to the Big Apple with his new bride, Dhawan-who until then shared a large apartment with Kondur at SoHo in Manhattan-told his friend that he planned to take the plunge. Was he interested in joining hands? Kondur was.

In the latter half of 1998, Kondur and Dhawan (who by then had moved with his wife to a one-bedroom set up on 225, East 79th Street) started putting their business plan together. Once they had their 15-page presentation finalised, they made a pitch to McCown and Jeffrey C. Keil, Chairman of International Real Returns, a private investment advisor. It helped that both McCown and Keil were Harvard alumni, besides which McCown had been Dhawan's employer just a few years earlier. McCown and Keil, along with some of their partners, gave Dhawan and Kondur $500,000 in seed capital to go out and raise money from other investors. They also promised to invest $20 million, provided the energetic duo could get other investors to first cough up $35 million at least.

Over the next five months, Dhawan and Kondur criss-crossed the US, flying cheap airlines and living out of inexpensive hotels, and met dozens of potential investors. A few said a polite no, but most, interestingly, liked their sheer energy and enthusiasm. Among them were people like Henry M. Paulson Jr., Chairman and CEO of Goldman Sachs, Rajat Gupta of McKinsey, Victor Menezes of Citigroup, Gurcharan Das, formerly of P&G, besides companies like Microsoft. Says Das: "In some ways, they reminded me of myself when I was their age. They had this fire in their belly and a desire to come back and do something for the nation." In the fall of 1999, they closed the fund at $63.8 million. Messrs Dhawan & Kondur were in business.

Damned by the Dotcoms

When the two young investors (Dhawan had just turned 30 and Kondur was only 28 then) moved into their 900-sq-ft office in Mittal Chambers in Mumbai's business district of Nariman Point, the dotcom frenzy in the US was already winding down. But in India, Net babies were still mushrooming out of every nook and cranny, and Dhawan-whose basic idea was to replicate America's dotcom boom in India-refused to believe that it could die a sudden death, which it did. So, in a matter of 90 days, Dhawan and Kondur mowed through some 500 business plans and even visited 150 outfits. While their average size of investment was small, they wagered on a string of dotcoms with names as bizarre as Cheecoo and Planet Saffron (See The Doomed Dotcommers). More than 40 per cent of the $64 million went into such companies, and most of it had to be written off in 2001.

Around late 2000, when it became apparent that dotcoms in India were doomed, Dhawan realised that they had a big mess on their hands. Two things needed to be done: One, salvage whatever little value was left in their dotcoms and, two, cobble together a new fund if ChrysCapital were to have a tomorrow. Early 2001, Dhawan and Kondur hit the road again to raise some more money. They travelled "like mad men" over six months "banging a lot of new doors". A lot of the previous investors didn't come on board, but luckily for them Harvard, which has a fund pool of $20 billion, obliged this time round, and the duo finally managed to raise $127 million. "It was a lifeline that had been thrown to us and we were determined not to mess up this time," recalls Dhawan.

In a move that surprised ChrysCapital's investors too, Kondur quit-ostensibly to set up his own BPO, but actually because the partners fell out-and Dhawan had to rope in more experienced managers like Ravi Bahl, who joined in the middle of 2001. By then ChrysCapital also refocussed its own strategy and decided to be a generalist rather than a specialist fund, to do "growth capital" (industry jargon for funding companies seeking aggressive growth), to invest in start-ups only in industries that the team understood thoroughly, and to set up an office in the US not just for fund raising, but also investment. "We realised that to be successful, we had to do fewer things and do them better," says Brahmal Vasudevan, Dhawan's Harvard batchmate and head of ChrysCapital's US operations.

The investments that followed were in stark contrast to the, well, irrational exuberance of Fund One. BPO, it services and financial services became the core of the second fund, although it has an infrastructure company, Hyderabad-based IVRCL, in the portfolio too (See The Comeback Portfolio). In each of these companies, ChrysCapital has picked between 8 per cent (like in Yes Bank and TechTeam) and as high as 80 per cent (in Global Vantedge). Going by the average performance of the portfolio, the second fund is clipping at an annual IRR of 48 per cent, but Dhawan points out that the rate will be hard to hold on to. Yet, it's unlikely that it will perform any worse than the first fund. Says Raman Roy, Chairman and Managing Director, Wipro Spectramind: "Ashish is one of the smartest guys around, he understands things very quickly."

Smart Fund Raiser, Smarter Investor?

Few in the private equity business will dispute Dhawan's extraordinary fund-raising ability. But ask them if he's as brilliant an investor and they'll demur. First of all, they point out-and to be fair, Dhawan readily admits as much-ChrysCapital is not about him alone. There are several smart managers (See Dhawan's A-Team) who work with him. In fact, one of his former colleagues says that much of ChrysCapital's dotcom fiasco happened because of Dhawan's infatuation with the phenomenon. Besides, Kondur, and not Dhawan, may have been the driver of ChrysCapital's first-ever and the most famous and life-saving deal: the investment in Spectramind. When ChrysCapital started talking to Raman Roy, he was already negotiating with at least six other venture funds and the man who spent the most time trying to woo Roy (once, an entire day on October 9, 1999) was Kondur, not Dhawan. Even Spectramind's deal with Wipro happened not because of Dhawan (Kondur was out by then), but because of Azim Premji, who personally visited Spectramind's Okhla facility before investing $10 million in 2001. The final landmark deal where Wipro bought out ChrysCapital's stake for $60 million about a year later also happened because of Premji stepping in-especially when it came to buying the management's part of the stake. Says Suresh Senapaty, CFO, Wipro: "Basically, (Premji) told us to ensure that the management felt like a winner in this deal."

KEY EXITS AT CHRYSCAPITAL Not companies, but people.

Raj Kondur Co-founder and Dhawan's Harvard buddy and flat mate, Kondur ostensibly left to launch his own BPO outfit. In reality, Dhawan, who even then owned the majority stake in ChrysCapital, may have forced his exit. Shujaat Khan He was another Managing Director at ChrysCapital. When BT last heard of him, he was looking for a job. Luis Miranda He was a Managing Director at ChrysCapital, but fell out with Dhawan. An MBA from Chicago, Miranda now heads IDFC Asset Management Co.

Another criticism about Dhawan you are likely to encounter in the business is that he's figured out a great way to avoid lemons-"he simply piggy-backs on deals of other private equity investors," one of his competitors told BT. As evidence they point to UTI Bank, where CDC Capital Partners got in first, Mphasis, where Baring Private Equity Partners India made a bigger and bolder bet by buying an ailing BFL Software and then merging it with Jerry Rao-promoted Mphasis, or IVRCL and Yes Bank, where CVC International made the first move.

But, then, you don't get into Harvard and graduate with flying colours if you don't have a damn good head on your shoulders. To Dhawan's credit, he did spot the BPO wave much ahead of its coming and he also knew which horse to back. He was also smart enough, even as a 29-year-old, to turn down McCown's suggestion to bring the first fund as a McCown De Leeuw venture. As McCown told BT, Dhawan felt that an indigenous fund would better appeal to Indian entrepreneurs. Says Giri Devanur, CEO of Ivega, an investee company recently sold to The Chatterjee Group: "Ashish is a brilliant individual. He is a trend spotter and is able to latch on to new things very quickly." Devanur speaks from experience. In early 2000, he ignored Dhawan's advice to move into the BPO space and suffered for it.

Not just that. Dhawan, who was born in Delhi but went to school in Kolkata's St. Xaviers, can really push himself. E. Sudhir Reddy, 43, Vice Chairman and Managing Director of IVRCL, recalls his first meeting with Dhawan last November. It was supposed to be a breakfast meeting but Dhawan ended up spending close to eight hours at their office, chatting up everybody from the engineer to the draftsman in his bid to understand IVRCL's business. Past month, when Dhawan went to China on a vacation with his wife, two kids, and parents, he was regularly working his mobile phone. Says Ajay Relan, Managing Director of CVC International, a good friend and neighbour: "He's incredible. He was sending me four-to-five text messages a day and also calling up because we were trying to get a deal done."

Dhawan, who likes an occasional evening walk in Delhi's Lodhi Gardens with friend, mentor and investor Das, can also display tremendous amount of courage if he's convinced about an investment. For example, soon after he invested in Mphasis, paying Rs 350 a share when the prevailing market price was Rs 230, the stock plunged to Rs 60. But Dhawan held on, convinced that Mphasis was a good bet in the long term. Says Jerry Rao, Chairman and CEO, Mphasis: "It must have taken a lot of courage and foresight to invest in us back then." His stand was vindicated. Today, the stock quotes at Rs 245, post a 1:1 bonus, and ChrysCapital still has half its original investment in the company that is worth another $30 million. Says McCown: "Every year we have three or four undergraduate analysts at the firm who stand out. But Ashish is simply the best we ever had."

But as some super achievers can be, Dhawan is impatient and not as good a people manager as some expect him to be. For instance, his former colleagues are pretty bitter about their experience at ChrysCapital. A rival private equity investor complains how Dhawan once hijacked a done deal simply by offering a higher valuation. Another one-time friend, who claims to have acted as Dhawan's sounding board when the fund was being set up, says that when it was his turn to ask Dhawan for help, he didn't give him the time of day. Dhawan's defence: "I am not perfect." Not that Dhawan can't be inspiring when he wants to. Rao of Mphasis recalls the "brilliant speech" that Dhawan delivered soon after he made the investment. It was so good that it worked like a "shot in the arm". Dhawan also doesn't interfere in the day-to-day operations of his investee companies. "If we have to run a company, it means we've messed up," he says.

With his third fund, Dhawan wants to do more of the same thing: invest in promising companies in a wide variety of industries. He is currently looking at a few deals, one of which is a heavy engineering company. "I want ChrysCapital to be a premier investment firm that is ahead of the curve and is associated with building a few world-class companies from India. With the third fund, I have that platform," he says. Dozens of investors around the world seem to think that he does. Now, Dhawan only has to deliver.

-additional reporting by Priya Srinivasan in Mumbai, Venkatesha Babu in Bangalore, and
E. Kumar Sharma in Hyderabad