If the last nine months of private equity (PE) activity are any indication, PE investments are poised for a strong finish in 2015. Bain & Company, the leader in consulting to PE firms in India and globally, predicts that PE transactions will touch a record $20 billion this year, higher than the previous record of $17.1 billion in 2007. Heightened financing in consumer technology space and big ticket investments in real estate and financial services will propel PE activity to hit a new high this calendar.
PE investments for the first nine months of this year have al ready hit $16.7 billion, outpacing 2014's total PE deal value of $15.2 billion. "The growth trend indicates that PE investment activity this year will surpass 2007, which was the best period so far," said Madhur Singhal, consulting principal, private equity practice, Bain & Company.
The deal activity has been chiefly driven by the country's booming consumer technology sector, which attracted $5.4 billion of investments, followed by real estate and financial services with $3.6 billion and $2 billion, respectively, during the first nine months of this year.
Bain & Company's PE deals database doesn't include transactions where deal value is not disclosed. The three sectors accounted for 65% of the total deal value in the January-September period of 2015 and are expected to keep up the momentum in the October to December period too. "The consumer tech space needs more capital to scale up and will continue to attract more private equity," Singhal said. Early-stage and growth investments dominated 85% of the deals in the first nine months of 2015.
PE funds such as Tiger Global, Blackstone, Temasek, Advent, SoftBank, Actis and GIC have invested about $125 billion in 5,400 deals between 2005 and September-end of 2015. However, exits from portfolio companies continue to remain challenging.Many funds have been forced to hold on to their investments for a longer number of years than originally envisaged.
Exits reached $4.5 billion in the first nine months of this year, driven by public market and secondary sales. Real estate, financial services and telecom witnessed the highest number of exits. The top 10 big-ticket exits, including TPG Capital selling its stake in Shriram City Union Finance for $386 million and New Silk Route off loading its interest in PNB Housing Finance for $257 million, constituted 40% of the total PE exit value in the first nine months of 2015.
PE investments for the first nine months of this year have al ready hit $16.7 billion, outpacing 2014's total PE deal value of $15.2 billion. "The growth trend indicates that PE investment activity this year will surpass 2007, which was the best period so far," said Madhur Singhal, consulting principal, private equity practice, Bain & Company.
The deal activity has been chiefly driven by the country's booming consumer technology sector, which attracted $5.4 billion of investments, followed by real estate and financial services with $3.6 billion and $2 billion, respectively, during the first nine months of this year.
Bain & Company's PE deals database doesn't include transactions where deal value is not disclosed. The three sectors accounted for 65% of the total deal value in the January-September period of 2015 and are expected to keep up the momentum in the October to December period too. "The consumer tech space needs more capital to scale up and will continue to attract more private equity," Singhal said. Early-stage and growth investments dominated 85% of the deals in the first nine months of 2015.
PE funds such as Tiger Global, Blackstone, Temasek, Advent, SoftBank, Actis and GIC have invested about $125 billion in 5,400 deals between 2005 and September-end of 2015. However, exits from portfolio companies continue to remain challenging.Many funds have been forced to hold on to their investments for a longer number of years than originally envisaged.
Exits reached $4.5 billion in the first nine months of this year, driven by public market and secondary sales. Real estate, financial services and telecom witnessed the highest number of exits. The top 10 big-ticket exits, including TPG Capital selling its stake in Shriram City Union Finance for $386 million and New Silk Route off loading its interest in PNB Housing Finance for $257 million, constituted 40% of the total PE exit value in the first nine months of 2015.
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