According to a report by consulting firm Ernst & Young, infrastructure sector may attract private equity (PE) funds if the government takes steps, both policy and administrative, to boost investment activity in the sector.
In its recently released private equity annual report titled ‘Second Innings – An industry in transition’, the firm said PE industry is in transition now and sectors related to direct consumption such as consumer products, health care and financial services will continue to be the key focus sectors in 2013.
The report expects exits by PE funds to be active particularly toward the latter part of 2013, when a number of funds will be approaching the end of their terms.
Investors would evaluate the exit performance of a number of Indian general partners in the short term and wait for the election of the new government and the direction of its policies in 2014. Therefore, the report expects fund raising to remain subdued.
The report shows that PE market may not be able to determine its own balance in the next 12 to 24 months, both in the terms of number of fund managers and the extent of PE money that India can absorb annually.
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