The Hindu Business Line : Venture Capital firms' move to recruit, retain talent

Talent-starved India is looking at innovative and rewarding partnerships with all its vendors. In a trend that will be increasingly seen, venture capital (VC) and private equity (PE) firms are now partnering with select HR firms to retain key talent and recruit top talent in their portfolio companies. Apart from fusing in `smart capital,' VC/PE firms also bring `precious human capital' into the invested-company.

The Bangalore-based UTI Venture Funds, for instance, has tied up with three HR firms to "identify key talent and recruit the best ones from the market for our portfolio companies," says its Managing Director and CEO, Mr Raja Kumar. He says VC money is smart money and VC-backed companies are expected to grow much faster than their peers. "And growth without the right talent is impossible. Therefore it helps if we participate in the HR strategy ourselves."

Ad Astra Consultants, a Bangalore-based search firm that is one of the HR firms on UTI's HR vendor panel, has started a `venture engine practice' that is built with consultants who bring expertise and knowledge of the investors' world and their areas of investment focus across industries. "We have built specialist teams for them," says its Managing Director, Ms Nirupama V.G. As they are involved in the company's growth from investment stage, these HR consultants have a deeper understanding of the requirements and provide the right HR solutions for their `investee' organisations. Ad Astra's private capital practice has signed up with 3-4 VC firms and is `in talks with a few others to work around their human capital issues.'

According to industry estimates, private equity and venture capital firms invested about $7.4 billion in Indian companies in 2006. The Ernst and Young VC Insights Report 2006 ranked India No.5 among the top VC investing destinations. "For search companies like ours, it makes sense to partner with a growing industry like the VC industry," says Ms Nirupama.

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