Private equity firms like KKR and Blackstone are increasingly pushing their portfolio companies to establish global capability centers (GCCs) in India, with investments quadrupling in the last five years. These PE-backed GCCs, focused on sectors like SaaS and BFSI are designed for rapid value creation. They drive product development, enhance profitability and accelerate platform transformation. Private equity firms, including KKR, Blackstone and Warburg Pincus, are pushing their portfolio companies to set up global capability centers (GCCs) in India. Over the last five years, investments by such companies have increased fourfold, making this a new growth segment within GCCs, data showed. One in three mid-market GCCs set up in India in the past few years has been by a PE-backed firm, said Zinnov, a technology and GCC consulting firm. According to data from ANSR, which helps companies set up GCCs, mid-market GCCs accounted for 59% (around 118) of the GCCs incorporated in India in the last four years (about 200) and PE-backed GCCs at around 77 had a 65% share of the mid-market facilities.
“What sets PE-backed GCCs apart is the urgency and clarity of purpose,” said Vikram Ahuja, Cofounder of ANSR, which has helped set up more than 170 GCCs globally. “With compressed investment timelines and value creation at the core, these centers are designed from day one to deliver outcomes, whether it’s accelerating product development, enhancing Ebitda or driving platform transformation,” Ahuja said. Software-as-a-service, cloud, IT security, banking, financial services and insurance are the top industry verticals that have seen investment by PE-backed companies. ANSR said it has helped build more than two dozen such GCCs backed by PE firms in India. The mid-market segment, comprising companies with annual revenue of $100 million to $5 billion, has emerged as a sweet spot as the companies are agile, ambition-led and structurally lean, with India teams often plugged directly into global decision-making, Zinnov Managing Partner Nitika Goel said. “These GCCs are not auxiliary operations. They are fast becoming value creation engines — delivering on transformation mandates, product velocity and measurable business outcomes across the PE portfolio,” Goel said.
In a June report, ANSR said the PE-backed mid-market segment is on track for accelerated growth, with revenue projected to expand at 15–20% between 2024 and 2026. “GCCs in software products, BFSI and healthcare/life sciences are leading the charge, anchored in digital talent hubs like Bengaluru, Hyderabad and Pune…What differentiates PE-backed GCCs is their operating agility,” Goel said. Further, direct reporting lines to global CXOs cut through hierarchy and drive faster decisions with more accountability, built for outcomes than just oversight, which PEs actively seek. Companies that recently made investments GCCs include Blackstone-backed Lumina CloudInfra, Brookfield Business Partners-supported CDK Global, BlackRock’s Commvault, ABC Fitness owned by Thoma Bravo and Thomas H Lee Partners-funded BazaarVoice. Vista Equity Partners’ portfolio firms such as TRG Screen, StarRez, Sonatype and Assent too have set up such facilities in India. Other PE firms that are actively looking to help or have helped their portfolio firms set up GCCs in India include Apollo Capital, KKR, BlackRock and Ares, said Saurabh Joshi, partner – wealth and asset management at EY India. KKR and Blackrock themselves operate GCCs in India. The PE firms did not respond to requests for comment. India is home to more than 1,700 GCCs, or 17% of such facilities globally, employing around 1.9 million people. Their revenue contribution to parent companies is projected to touch $100 billion by 2030 from $64.6 billion in FY24.
GCCs are typically cost centers doing back-office operations like IT, HR and administrative work. In the past few years, the Indian centers have moved up the ladder to do more innovation and research and development, creating value-added work backed by artificial intelligence and digital transformation, helped by India’s technology talent. EY’s Joshi said many of the multinationals started with under 100 employees and quickly scaled to over 300, with a 4-to-5-fold growth in employee count. “Firstly, asset sizes globally have grown across private markets. Secondly, firms haven’t been able to find the necessary talent in their home countries and when they do, it’s expensive,” Joshi said. Meanwhile, India has developed a significant talent ecosystem because many third-party players operate here. “Globally, firms are working on transforming their core systems and building platforms for portfolio monitoring. There’s also significant work happening around data modernization,” Joshi said, adding that PE firms have been transitioning both back-office and front-office functions including fund accounting, controllership, finance, valuations, risks and increasingly, tech functions. If current momentum holds, Zinnov’s Goel said India would not just remain a talent engine but be the command center for PE-driven innovation. “But scaling this model depends on one critical factor: India GCC leaders stepping into enterprise-level ownership. It’s no longer about site management — it’s about mandate delivery,” she said.
Source : https://economictimes.indiatimes.com/tech/technology/pe-firms-pushing-their-portfolio-companies-to-open-gccs-in-india/articleshow/123173951.cms?from=mdr
