The improved performance in January 2020 is primarily on the back of increased value in credit investments, which rose over 20 times to $698 million, according to IVCA-EY monthly PE/VC roundup. This is also the highest value of PE/VC backed credit investments in a month in over two years.
Vivek Soni, Partner and National Leader - Private Equity Services, EY, said after a record-setting 2019, PE/VC investments in 2020 are off to a good start.
Credit investments are also a fast-emerging asset class for PE/VC as seasoned investors cherry-pick stressed opportunities thrown up by companies that need support to prevent going into NCLT. With a more enabling regulatory and policy framework in place, credit investments are off to a good start in January 2020. Globally, credit/stressed asset or special situation investing forms an important part of the multi-asset class strategy followed by large funds. We expect this asset class to increase significantly in value in 2020 as the PE/VC industry gears up to play a meaningful role in helping resolve part of India’s stressed asset problem by providing much-needed risk capital.
Growth capital deals were the highest in value with $968 million recorded across 13 deals (at par with $976 million in January 2019). Start-up investments stood at $533 million across 54 deals, 55% higher y-o-y ($345 million) and PIPE investments worth $232 million ($3 million in January 2019). Buyouts recorded the lowest value of investments at $71 million across three deals compared to $504 million across four deals in January 2019.
Infrastructure sector ($898 million across five deals) was the top sector in January 2020, followed by financial services ($531 million across 14 deals) and e-commerce ($264 million across nine deals).
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