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Emerging markets, including India, accounted for a larger share in the global private equity (PE) activity in the first six months of this year, despite a decline in the funds raised compared to the year-ago period, a report has said. Emerging Asia continued to lead and raised $11 billion in the first half of 2009, representing 69 per cent of total new commitments during the period, but a 61 per cent decline from the $29 billion raised relative to the previous year, the report by Emerging Markets Private Equity Association (EMPEA) said. “Emerging markets continue to account for a larger share of the global PE market, consistent with their contribution to global GDP and GDP growth,” EMPEA President Sarah Alexander added. […]
India’s power sector will be a key destination for private equity (PE) players to park their money, with close to $1.64 billion worth of infrastructure funds, mainly in power, awaiting their launch. According to industry experts, once the liquidity situation improves globally, the sector will see good investment momentum. This is despite the fact that PE investment in the power generation sector dropped by around 80 per cent between April and September 2009, to $157 million (around Rs 770 crore) from $902 million (Rs 4,419 crore) a year earlier. The number of deals also dropped to six from 17. According to Venture Intelligence, a research service focused on PE and mergers and acquisitions, investments in this sector for a comparative period in 2006 were $122 million, which increased to $495 million in 2007. “For the first time in the last four years the sector witnessed a negative growth”. […]
Some of the world’s largest buyout firms that made a beeline for India a few years ago now say they may have misjudged the market. Firms such as KKR and Co. Lp and Carlyle Group Ltd say the world’s third fastest growing economy has more companies that need growth capital than those ready for buyouts. In other words, these global private equity (PE) firms with large funds and specializing in taking over companies are wary of acquiring controlling stakes in Indian firms in the current environment. They would rather make growth-stage investments like smaller private equity firms do, typically in the $10-35 million (Rs46-161 crore) bracket. […]
Private equity (PE) and venture capital (VC) funds in India have tightened their purse strings. That’s because limited partners (LPs) – the main source of funding for venture capitalists — are reducing their exposure in this space. As per industry estimates, there has been a drop in new investments to the tune of 71% during the first nine months of 2009 as compared to the same period last year. Industry observers say limited partners are miffed with the returns shown by the general partners, who manage the fund and its operations on a daily basis, say industry observers. “Clearly, many LPs are looking at better returns and shorter investment term cycles,” says Sameer Mehta of Atlas Advisory. […]
Private Equity deals slowed to a four-year low of $644MM in Q3 Sep’09. (Year to date(Jan-Sep’09),113 private equity deals with $2,186MM were closed ) The quarter was the worst quarter in terms of deal value as total transactions size declined to $644MM compared to $793MM and 749MM in Q2 and Q1. […]
The domestic and international private equity players see India as the second most attractive destination after China and feel that the country may lead the global PE recovery, according a survey. As many as 33 per cent of investors, who participated in the survey, ranked China as the most attractive market, followed by India (29 per cent), other emerging markets (19 per cent) and developed markets (20 per cent). “India offers immense opportunities for PE investments and India will likely be at the forefront of a global PE recovery,” said a survey by research firm KPMG. […]
Global buyout giants such as Warburg Pincus and the Carlyle Group may have to wait a decade or more for Indian family business cultures to change before they can make big buyout deals, finance industry executives said. Meanwhile, growth capital funds have seen better opportunities in India finding bargains by taking stakes in new, fast-growing sectors such as education, healthcare, logistics and consumer-driven business, a private equity conference was told on Wednesday. “Private equity deals in India are mostly growth-led rather than leveraged buyout, as in the West,” said Deepak Parekh, chairman of Housing Development Finance Corp, India's top mortgage lender. […]
Several private equity (PE) firms are reviewing whether to continue operations in India even as the domestic economy is showing clear signs of recovery. Around half a dozen PE firms are said to be in the process of shutting shop including Candover, a UK-based buyout specialist, which has recently closed shop in India and Strategic Value Partners (SVP) which is close to winding up operations in the country. Although there has been some improvement in PE dealmaking over the last few months, the transactions are well below the level which was reported prior to September 2008 when investment bank Lehman Brothers declared bankruptcy. Analysts tracking the sector said that investments in the near future are unlikely to witness a big boom. […]
Private equity (PE) funds are shying away from making a wrong call on fresh investments. Instead, they are ramping up investments in their portfolio companies in order to help them weather the downturn. With the slowdown affecting economies across the world, PE deal flow has came down substantially from its peak in 2007. As a result, PE funds are now looking at incremental funding in their portfolio companies as one of the ways to deploy cash and report better returns to their limited partners (LPs). Market players said that one of the reasons behind incremental funding having picked up in recent weeks was that valuation continues to be an issue for deal closures. “The risk appetite has certainly gone down. Capital has become expensive and LPs are far more liquidity conscious now,” said the managing director of a large domestic institution-backed PE fund. […]
Private equity firms invested about $763 million across 47 deals during the quarter ended September 2009, according to a study by Venture Intelligence, a research service focused on private equity and M&A transaction activity in India. While the amount invested during the latest quarter was during the quarter was significantly lower than that during the same period last year (which witnessed $2,581 million invested across 132 deals) and also lower compared to the immediate previous quarter ($964 million across 47 deals). […]
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