Private equity funds in India have matured now. All these years private equity firms in India performed strongly, resulting in developing fresh investor interest and huge inflow of money.
It has been studied that performance of Indian private equity performance is less associated to public equity trends compare to European markets. This is due to the inefficiencies in a startup industry, particularly because of the dearth of transparency, less competition, and imperfect transmission techniques for capital.
It has been studied that performance of Indian private equity performance is less associated to public equity trends compare to European markets. This is due to the inefficiencies in a startup industry, particularly because of the dearth of transparency, less competition, and imperfect transmission techniques for capital.
Challenges before PE Managers
To be successful in this emerging and growing market, fund managers should have a comprehensive local network to acquire in depth knowledge and understanding of the cultural limitations in different countries when investing globally. Yet another challenge for investors also lies in selecting the experience and expert manager and gaining access to the right PE funds, as there are great difference in returns between average performers and top returns.
The emerging markets appears to be less susceptible to risk due to strong fiscal positions and improved institutional infrastructure, developed market risk, which is the result of global financial crisis.
Small Holding Periods
There is an emerging trend of a shorter holding period for PE investments. In India the holding stretch from the initial funding to the first exit is just two years prior to the financial crunch. The greater returns over a small time zone helped in generating more interest in private equity in the recent few years. In addition, domestic funds have been instrumental in influencing private equity in India.
It has been studied that the major obstacles before better growth in investment are the tax policies, availability of debt and the broader impact of informal economy. Public markets are playing role in improving corporate governance, cutting down the risk of investing in listed firms and offering an improved passage for private equity exits. It has catapulted the demand for equities.
Synopsis
Although the Indian market of private equity funds has reached a maturity stage, there are loop holes that require attention of the PE firms to compete and retain its relevance in the future market trends.
To be successful in this emerging and growing market, fund managers should have a comprehensive local network to acquire in depth knowledge and understanding of the cultural limitations in different countries when investing globally. Yet another challenge for investors also lies in selecting the experience and expert manager and gaining access to the right PE funds, as there are great difference in returns between average performers and top returns.
The emerging markets appears to be less susceptible to risk due to strong fiscal positions and improved institutional infrastructure, developed market risk, which is the result of global financial crisis.
Small Holding Periods
There is an emerging trend of a shorter holding period for PE investments. In India the holding stretch from the initial funding to the first exit is just two years prior to the financial crunch. The greater returns over a small time zone helped in generating more interest in private equity in the recent few years. In addition, domestic funds have been instrumental in influencing private equity in India.
It has been studied that the major obstacles before better growth in investment are the tax policies, availability of debt and the broader impact of informal economy. Public markets are playing role in improving corporate governance, cutting down the risk of investing in listed firms and offering an improved passage for private equity exits. It has catapulted the demand for equities.
Synopsis
Although the Indian market of private equity funds has reached a maturity stage, there are loop holes that require attention of the PE firms to compete and retain its relevance in the future market trends.
