Fund raising outlook for India private equity firms most negative: report

Myanmar, Japan and Africa emerging as new markets for the PE firms

India, which caught the fancy of the private equity firms not many years ago, is no longer is in the wish list of the firms. Instead, countries not known much for being the hot bed of private capital are emerging as the new stops for PE firms.

In terms of fund raising, BRICS (Brazil, Russia, India, China and South Africa) witnessed the steepest decline since 2011, with the Indian PE firms having the most negative outlook on the ability to raise new funds, says a recent report on trends in private equity by Grant Thronton.

At the same time, countries like Myanmar, Japan and Africa have emerged as new markets for the PE firms.

“This time, last year, for example, it would have been hard to imagine Myanmar being highlighted as frequently as it has been this year in the market, with considerable potential for private equity investments,” says the report.

Likewise, the strengthening of yen has prompted a wave of interest in acquiring foreign business. 

Again, Africa, which has the image of last frontier for PE firms, has attracted lot of attention from South Africa and MENA, said the report.

Among the BRICS nations, China and India witnessed a substantial downturn in terms of investor confidence.

India is under more than one economic pressure, with political burdens and policies having an adverse affect on investor sentiment, according to the report.

Overall, the top four sectors for PE in 2012 so far have been consumer, healthcare, business services and industry and manufacturing.

Also, in India, the cooling off of overheated public markets in recent days is expected to translate into falling PE multiples, the report said.