Chennai: Infrastructure has never been such a happening sector as far as private equity and venture capital investments are concerned. The cumulative PE/VC investment of $12 billion in the infrastructure sector between January and July is more than the total investments received by the sector in past seven years put together.
The infrastructure has been witnessing the private equity and venture capital investments going up since 2012. In 2012, the sector received just $690 million for the full-year and January-July period of 2019 has seen investments touching $12,011 million. In the past seven years— between 2012 and 2018—the sector cumulatively received $11,852 million and within just seven months of 2019, the sector has crossed this cumulative investment, data from EY shows.
Ready, yield generating infrastructure assets have become an attractive investment class for global buyout, pension and sovereign funds.
Such investments give an opportunity to infrastructure developers to monetize part of their holdings and free up capital for funding greenfield infrastructure development and deleveraging.
Brookfield's $3.7 billion investment in Reliance Jio, announced in Julyis the largest ever PE/VC deal in India, while the asset management company's buyout of Reliance's East West pipeline for $1.8 billion in March was another big deal of the year.
Brookfield's Jio investment also helped total private equity and venture capital investments in July to move up to $8.3 billion. The sector grabbed a total of $4.7 billion in July.
"PE/VC investment activity in has continued with the strong momentum built up in 1H19. The $8.3 billion worth of PE/ VC investments in July 2019 is the highest value of monthly investments by PE/VC funds ever recorded, eclipsing the previous historical monthly high of $7.1 billion invested in March 2019. Yet again, this strong performance has been driven by mega deals in the infrastructure sector— $4.7 billion investments in July 2019," said Vivek Soni, Partner and National Leader Private Equity Services, EY.