Private equity (PE) and venture capital (VC) firms set new fund-raising milestones and raised a combined $4.9 billion in 2016 across 33 India-dedicated funds, according to research and analytics firm Venture Intelligence.
This was 9% more than the corresponding figure in 2015, when a total of $4.5 billion was raised by PE and VC firms across 27 deals.
Markets regulator Securities and Exchange Board of India (Sebi) on Monday put in place detailed guidelines for public issuance of Real Estate Investment Trusts (REITs) including allocation of units to institutional investors. The trusts, its promoters and directors, which have been barred from accessing the securities markets, or those who are in the “wilful defaulter” list, would not make any public issue, Sebi said in a circular.
For private equity investors in India, 2016 may have been one of the worst years in terms of investments but hiring in the industry hit a new high even as several senior executives quit to start their own funds.
More than half-a-dozen senior fund managers have moved out to start their own funds, ranging from hybrid to debt to mezzanine financing while a similar number of people quit to launch their own Internet startups, according to data from executive search firms.
SEBI in past have a long list of failed attempt to bring startup companies and investors on its IT Platform (refer to author Ashish Pandey’s previous article for portal named “Will SEBI’s New Efforts Be Able to Attract Listing of Startups”) and AIF, SME and surprisingly this move is an another step only in opposite direction.
The biggest dilemma, for so many of us, now a day’s is what is startup? Whether it has any definition? Can it get illustrated, in its true sense? What it covers and what not? These questions may not be as relevant for the investors and founders but for regulators definitely.
In March 2015, the Securities and Exchange Board of India (SEBI) constituted a standing Alternative Investment Policy Advisory Committee (AIPAC) under the chairmanship of Shri. N. R. Narayana Murthy. AIPAC submitted its first report in January 2016 and its second report was released by SEBI on December 1, 2016 (Report 2) for public comments.
The Alternative Investment Fund (AIF) industry has been growing exponentially. The cumulative funds raised increasing from Rs 3,841 crores (approximately, USD 568 million) in September 2013 to Rs 29,016 crores (approximately, USD 4292 million) in September 2016. In approximately four years since the introduction of SEBI (Alternative Investment Funds) Regulations, 2012 (Regulations), the number of AIFs registered has reached 268.
Private equity/ venture capital investments declined both in terms of value and volume in November, an EY analysis showed. In value terms, PE/VC investments in India stood at $908 million, down 50 per cent, from $1.82 billion in November last year.
Do Wall Street’s smart-money investors have an easier time than you do wresting income from their portfolios? Maybe. But it doesn’t have to be that way. You can use their tricks too.
Like you, they have to deal with market risk, default risk, credit risk and the like. Also like many other investors, the smart money — high-income or high-net-worth investors, who can afford investment advice from the priciest financial advisors — uses traditional income strategies. But smart-money investors also make more use of alternative strategies than they did, say, five or 10 years ago, estimates Tony Hallada, managing partner at CliftonLarsonAllen Wealth Advisors (CLA). And they use those strategies more than Main Street investors do.
Category III Alternate Investment Funds (AIFs) will have an increasingly significant role to play in liberating the Indian High Net Worth Investor (HNWI) from the inherent volatility and lack of diversification by investing in the domestic equity markets. Given the minimum investment in these funds is set at Rs 1 crore, the option is effectively closed for the mass-market retail segment.
Alternative asset managers such as hedge funds, private equity and venture capital firms do not seek to outperform a benchmark such as a stock index. They seek an absolute return irrespective of whether the market is up or down. Often AIFs are used to protect and preserve investor capital and as such they play a key role in diversifying an investor’s exposure in the wider market.
Angel investors are a class of well-to-do investors, usually experienced industry folk who take equity stakes in startups. They take very early-stage businesses under their wing. Typically, institutional investors such as venture capital funds or private equity funds do not like to commit capital to tiny businesses. Nor do they like to bet their shirt on firms that are yet to prove themselves in the marketplace. Angel investors literally step in where others fear to tread.
The last couple of years have been rocky for hedge fund managers following a rollercoaster ride in the commodities markets. Hedge fund manager Crispin Odey saw his wealth melt by £200 million ($287 million) this year to £900 million, according to the Sunday Times Rich List, released on April 24.
Alan Howard, the cofounder of Brevan Howard, also fell from the number one spot after a devastating £460 million plunge in his wealth over the last year.