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BankAm arm to invest $3-10 m in Bangalore-based IT companies
Kavitha Rajasekhar
Bangalore: The private equity arm of Bank of America -- Banc of America Equity Partners (BAEP) is all set to make direct investments in four Bangalore-based IT companies, according to the company's managing director Asia-Pacific David Loseff. Speaking to The Financial Express, Mr Loseff said the investments -- all in the IT services and products segment -- were expected to range between $3 million to $10 million and would be finalised in a month's time. BAEP was also likely to invest in future rounds of fund raising of the companies, he added. The private equity arm of the global banking major has a total fund of $250 million of which close to 40 per cent is expected to be invested in India over the next few years. The focus of the fund in India has been re-engineered from being IT services/IT enabled services focused to extensively look at the telecom, technology products and wireless segments with India and Japan as key investment markets. While the fund has been active in the South East Asian region, mostof the large investments in the Asian portfolio prior to the realignment have been in the traditional sectors including food and beverage, movie theatres, integrated chip packaging, etc. As part of the company's new focus plans in IT, BAEP is also extensively exploring investment opportunities in the service provider segment. ``The infrastructure services or the full service provider segment is an emerging area. While this area is likely to see significant consolidation it will result in market domination by a few large players. We have an investment in Global Tele Systems which is also getting into this segment with its data centers, etc.We may make more investments in this segment,'' Mr Loseff said. Addressing the issue of the much talked about impact of US slowdown on the investor segment, Mr Loseff said BAEP was not planning to restructure its investment plan in India in view of the slowdown and remained committed to India specific investments. ``What the slowdown will bring is a rationalisation of valuations of technology companies. While there may be some temporary adjustments and dislocations in the IT services area the underlying demand for technology services from India will sustain,'' he added. While the industry is talking about investors tightening their purse strings in view of the slowdown, BAEP is planning to maintain and in fact slightly increase investments. As revenue growth prospects for the investee companies remained good, a rational market was a good market to invest in, Mr Loseff said. Furthermore, the removal of the IPO market increased the need for private equity, he mentioned. ``Blips may happen but we are certain that India will benefit and therefore our conviction on long term fundamentals remain strong,'' Mr Loseff said. Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
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