The Rapid Rise Of India's Private Equity, VC Industry

Editorial Staff

12 March 2019

India-based private equity and venture capital fund managers held $28 billion in assets under management as of June last year, the latest date for which figures are available, and that translates into an $18 billion rise from the financial crisis year of 2008, figures show.

The pace of growth in AuM has accelerated since 2015, spurred by strong fundraising momentum, according to , the research firm tracking alternative investments such as private equity, real estate and hedge funds.

“Fundraising has been spurred by a virtuous cycle of strong distributions from private equity and venture capital funds driving investor appetite and reallocation,” it said. The report said that India-based private equity and VC funds have returned more capital to investors than they called up in each year since 2014. At the same time, regulatory changes and government backing have contributed to a strong deals market, it said.

“India is one of the fastest-growing global economies, and is on track to surpass the UK to become the fifth-largest economy in the world in the coming months. Private equity and venture capital have played an integral part in this development: the provision of private capital has spurred the boom in technology start-ups that have characterised the country’s modernisation,” Christopher Elvin, head of private equity at Preqin, said.

“The momentum of recent years seems set to continue unabated – investors have a strong appetite for investments in India, and there are a record number of funds in market to cater to that appetite,” Elvin said.

As of January this year, a record 125 funds are in market, Preqin said.

2017 marked a record 35 India-based fund closures, securing an aggregate $3.6 billion – an all-time high. 2018 continued that trend as 26 funds raised a total of $3.3 billion, it added.