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Is India Once More an Attractive Investment Destination?

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May 8, 2014

As the private equity (PE) marketplace has fallen out of love with emerging markets and the BRIC nations in particular, many commentators and industry analysts have begun to wonder whether these countries were locked into a terminal decline from which they’d find it difficult to escape.

 

However, the fast moving nature of the industry means there are already shoots of hope in some BRIC nations, and India in particular is showing signs of being a lucrative PE destination in the coming months. Previously on DealMarket Blog, we looked at how the real estate markets in Pune were getting plenty of attention from the PE marketplace.

 

Now, Financial News is reporting influential European PE investor Partners Group has set its sights on India.

 

Partners have actually been one of the leading industry names that have remained bullish and confident over India as the rest of the industry has turned away. Now, they are looking to establish a local presence in the country by opening an office in Mumbai. Whether Partners will look to open other offices across India owing to the size of the country remains to be seen, but it surely cannot be discounted.

 

Such is Partners’ commitment and belief in the Indian PE marketplace that the Managing Director of the firm, Cyrus Driver, will be the man to lead the new Mumbai office. Driver told Financial News, “Valuations have largely come down from the high levels of a few years back and we believe it is a great time to invest in private markets here. On the private equity side, we showed our commitment to India last year with two transactions.

 

Looking ahead, we have a full pipeline and are actively pursuing investments.” Partners have had a prominent presence from an investment perspective since 2006. Their biggest deal in the country last year was a $270million majority stake acquisition of CSS Corp, a global tech services support business. The firm also invested in schools and education heavily in India in 2013.

 

The firm’s decision to open an office in India follows the trend currently being seen in Africa, where many PE houses that have long had interests in the region have started to realise the value of having a local presence. Cristoph Rubbeli of Partners Group told Financial News, “Although we held back when valuations were at their peak, we believe the market currently offers compelling opportunities that fit with our private markets relative value investment approach.”

 

It will be interesting to see how Partners perform with new fundraisers, and what returns they see from any older investments in the months to come, and whether this performance helps to transform the negative perception of India that remains in place throughout the industry.

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