Business

PE, VC investments hit an all-time high

Heavy traffic: March 2019 saw hectic deals in investments and exits in infra and real estate asset classes.

Heavy traffic: March 2019 saw hectic deals in investments and exits in infra and real estate asset classes.   | Photo Credit: Getty images/ IStock

Private equity and venture capital investments in March 2019 recorded an all-time high of $7 billion, more than twice the value recorded in the same period in the previous year, says EY’s monthly deal tracker.

While buyouts and private investment in public equity deals remain strong, exits in March 2019 declined by 34% in terms of value on a y-o-y basis.

Commenting on the PE landscape, Vivek Soni, partner and national leader — Private Equity Services, EY, said the Indian PE/VC industry was off to a very strong start, with $11.4 billion of PE/VC investments in Q1, eclipsing the previous Q1 high (2018) by 37%, on the back of strong investment flows recorded in March 2019 at $7 billion (61% of all investments received in 1Q2019). March 2019 saw hectic deal activity, both in investments and exits in the infrastructure and real estate asset classes.

With large global buyout, sovereign and pension funds becoming more active investors in the Indian PE/VC sector, there is increasing interest in yield generating assets (roads, pipelines, telecom infrastructure, and commercial real estate). Corporates as well as government bodies are looking to monetise passive assets as seen in the Brookfield-RIL pipeline deal.

As per the EY deal tracker, one notable exit event in March 2019 was the successful IPO of India’s maiden REIT offering, backed by Embassy / Blackstone consortium.

This is a ‘Lighthouse Event’ for the Indian real estate private equity sector, which, over the past three to four years, has seen significant amount of PE investment into portfolios of rent generating commercial properties such as office, retail malls and industrial warehousing.

Investments

PE/VC investments in March 2019 were more than twice the value invested in March 2018 ($7 billion in March 2019 vs $3 billion in March 2018) on the back of large deals. March 2019 was the best month ever for PE/VC investments, 30% higher compared to the previous high of $5.4 billion recorded in August 2017.

Number of deals in March 2019 increased by 44% compared to the same period last year (89 deals in March 2019 vs 62 deals in March 2018).

There were 13 large deals (deals of value greater than $100 million) aggregating $6 billion in March 2019, compared to four large deals worth $3 billion in March 2018. Brookfield’s $1.9 billion buyout of RIL’s east-west pipeline was the largest deal during the month, as also the largest deal ever in the infrastructure sector.

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Printable version | Aug 8, 2020 11:09:23 PM | https://www.thehindu.com/business/pe-vc-investments-hit-an-all-time-high/article26946262.ece

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