With the real estate market in a state of flux, private equity investors are increasingly moving their investments to companies engaged in real estate ancillary businesses, where returns are perceived as fairly safe. According to a report by international realty firm Jones Lang LaSalle, global commercial property transaction volumes in the first six months of 2008 have fallen 41 per cent to $236 billion, from the record levels seen in first half of 2007. At least six private equity investors are learnt to be in talks with Pune-based Universal Construction Machinery and Equipment. Mumbai-based Sankalpan Group revealed that three private equity investors are interested in investing in its four subsidiaries.   more »

Bio-technology, film production and education are among the five emerging sectors expected to attract an investment of $8.5 billion from private equity and venture capital funds in the next five years, a study has said. The other key sectors identified by the private equity (PE) and venture capital (VC) funds are clean technologies and logistics, according to the Assocham-Deloitte study. PEs and VCs are shifting to non-IT areas, where regulatory mechanism is disappearing, it said. "VCs and PEs which for long has been choosing IT for investment purposes, have found huge investment opportunities in above listed areas as regulatory regime in them is gradually disappearing," Assocham President Sajjan Jindal said.   more »

Reserve Bank of India (RBI) has asked the Union finance ministry to prevent foreign investors from side-stepping foreign investment norms by taking recourse to the venture capital (VC) route. With increasing concerns of foreign capital driving up real estate prices, RBI has recommended that foreign venture capital investments (FVCIs) be restricted to nine sectors (investment in other sectors being treated as foreign direct investment). It has suggested that capital market regulator SEBI set up a screening mechanism for all pending and future FVCI proposals. The new set of restrictions will help prevent low capital base, circumvention of takeover guidelines and round-tripping of investments. Out of 58 FVCI applications pending with RBI, 22 are considered to have low capital base.   more »