PE firms see returns rise in ’13, hurdles to fund-raising
Another interesting (and growing) trend in 2013 will be secondary deals and limited partner (LP) to LP change of hands. “In funds which are under water on investments, the LPs on those funds will look to exit the funds by selling to other LPs at a discount. These deals will take place outside India and so will not really be tracked in the Indian market. But if they happen, then the new LPs will provide a lease of life to the funds to continue holding on its investments and try in some manner to generate better returns,” Utamsingh said. “In 2012 so far, 25 out of 94 exits were through secondaries, ie, PE to PE transactions. We can expect this trend to continue as there is a very large pool of good portfolio companies and the larger PE funds are targeting these companies for transactions.”
PE firms find the Indian consumer growth story intact. “Domestic consumption sectors like healthcare, pharmaceuticals and financial services and export-oriented, IT-related services will remain attractive,” said Kohli of ChrysCapital.
“Consumer-oriented sectors will be well accepted by the market,” said Girish Nadkarni, partner at IDFC Private Equity.
“Carlyle is always evaluating opportunities to deploy more capital in India. Sectors like financial services, consumer, healthcare and information technology are attractive,”
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