Chennai: With two more months to go, private equity investments are on track to hit $50 billion mark by the end of 2019. Investments are already 16 per cent higher than that for the entire year of 2018.
October 2019 recorded investments worth $3.3 billion and with this, the year-to-date PE/VC investments have moved up to $43.7 billion. In entire 2018, the total investments had touched a record high of $37.5 billion, according to a round-up by EY.
The investments till October are already 16 per cent higher than that in 2018 and EY expects that in two more months, the yearly investment will touch $50 billion.
Infrastructure sector had led PE/VC investments so far in 2019. Even in October, infrastructure sector recorded $1.4 billion, accounting for 43 per cent of all PE/VC investments for the month as compared to 6 per cent in October 2018. “Global buyout, pension and sovereign funds continue to take large bets in the Indian infrastructure sector and this trend is expected to remain strong in the near future. With global interest rates once again on a downward trend, steady yield-generating assets in India present a good opportunity for large global pools of capital hungry for yield,” Vivek Soni, partner and national leader Private Equity Services, EY said.
Year-to-date investments in infrastructure stood at $14.3 billion, which was 225 per cent higher than $4.4 billion invested in the sector between January and October 2018.
Meanwhile, exits remained largely muted in October due to the subdued sentiment in the capital markets. In 2019, year-to-date exits aggregated $9.1 billion compared to $26 billion over the same period last year. “However, if we adjust for the large $16 billion Walmart-Flipkart deal, the underperformance in PE/VC exits is not significant,’ said Soni.
The month of October recorded 14 exits worth $960 million, 30 per cent lower than the value of exits recorded in October 2018 at $1.4 billion and 64 per cent lower than $2.6 billion in September 2019.
In October 2019, open market exits were highest at $878 million across eight deals, accounting for 91 per cent of total exits by value. The month also recorded the highest monthly value of open market exits in two years.