Alternative Asset Analysis (AAA), the Boston-based organization that analyzes and promotes alternative investment options, has revealed that several reports, including one from Ernst & Young, are showing a rise in private equity investment in India.
Boston, MA, USA, June 29, 2011 -- Alternative Asset Analysis (AAA), an organization that analyzes and promotes alternative investment options, says that Indian private equity market is seeing a major increase in popularity.
The change in attitude towards private equity (PE) has been attributed to the sub-par stock market performance, according to a new report by Ernst & Young. The report claims that more businesses in the subcontinent are now taking the PE route to raising funds rather than going the stock market route through a public listing.
Global consultancy firm Grant Thornton said that over the past six years, Indian PE investment has grown to US$50 billion, up significantly on the US$31 billion raised through initial public offerings.
AAA’s analysis partner, Anthony Johnson, said that the news of the rising PE popularity in India was good for the alternative investment market in Asia. He stated, “It seems businesses in India are now actively seeking out solid PE opportunities, which helps to normalize alternative ways to make money in the Asian market as a whole.”
He continued, “Alternative investments are growing in popularity in the West, with more and more fund managers and individuals seeking out ethical and lucrative opportunities in emerging markets. Popular options are real estate investments and forestry investments in Brazil through firms like Obelisk International and Greenwood Management.”
Avinash Gupta, the head of Deloitte in India, explained why PR is growing among Indian businesses at the moment: "Whenever public markets go soft, PE has a good time because they have money. Besides, in India, corporate growth is driven on the basis of getting equity and possibly by leveraging it further. So they tap PE."
PE does, however, mean that businesses often need to wait longer for longer for their cash than they would if they had opted for an initial public offering.
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