PE, VC investments halve in September; FY22 expected to see record activity: Report

Investments by private equity and venture capital funds in September more than halved to USD 4.8 billion as compared to USD 10.9 billion in August, but higher than the USD 4.3 billion recorded in the year-ago period, a report said on Thursday. On a quarterly basis, investments in the July-September period surged 3.4 times to USD 25.3 billion, with a sharp rebound in buyout investments and start-up investments accounting for 39 per cent of investments, the report by consultancy EY and industry lobby IVCA said.

“In our view, we could see 2021 PE/VC investments and exits exceed USD 70 billion and USD 50 billion, respectively,” said Vivek Soni, partner at EY.

Meanwhile, rival Grant Thornton Bharat also came up with its deal tracker report, which suggested that there were 597 transactions worth USD 30 billion in the September 2021 quarter with the initial public offerings (IPOs) driving the number at USD 5 billion.

“(The year) 2021 has seen greater resilience, digital insurgency and inventions driving the deal activity in the recent months. The year witnessed growth every quarter and we expect the trend to continue for the coming quarters,” its partner Shanthi Vijetha said.

The report by EY and IVCA said pure-play PE and VC investments, which exclude investments in real estate and infrastructure, recorded the highest-ever quarterly value at USD 23 billion, 2.4 times the USD 9.7 billion recorded in the year-ago period, and 63 per cent higher than the USD 14.1 billion recorded in the June 2021 quarter.

PIPE (private investment in public equity) investments recorded USD 1.3 billion across 23 deals in the reporting quarter as against USD 1.8 billion across 18 deals in the year-ago period, and USD 619 million across 18 deals in the June 2021 quarter.

Credit investments recorded USD 1 billion in the September 2021 quarter, compared with USD 1.1 billion in the year-ago period and USD 355 million in the preceding quarter.

The September quarter recorded exits worth USD 11.3 billion, 15 times the value recorded in the year-ago period and 35 per cent lower than the preceding quarter.

PE and VC exits have recorded an all-time high of USD 33.4 billion within the first nine months of 2021, driven primarily by large strategic exits, it said.

The quarter saw USD 3.4 billion in fundraises compared with USD 2.8 million raised in the year-ago period and USD 1 billion raised in the preceding June 2021 quarter.