On the sectors which may attract investors, he said the obvious ones are digital infra and service providers, domestic consumption-led themes, healthcare and core sectors where he expects Government spending to positively impact demand.
"We had created a bespoke Platform, called Optimus for our UHNI clients. this platform enables our clients to participate with the best of portfolio managers and at the same time choose their risk adjusted asset allocation model. This unique offering which was launched late December 2019, has been able to raise approximately Rs 1000 crs in the period ended April 30, 2020. This is a remarkable achievement in such challenging market conditions and vindicates the 'keep it simple and disciplined' approach to asset allocation," said Sriniwasan.
Vivek Soni, partner and national leader – Private Equity Services at EY India said that he expects fund raising by India dedicated funds to remain under pressure for the next 3-4 months at the very least.
Most LP’s are in wait and watch mode as they take stock of their own investment portfolios. Hopefully, some clarity on global as well as domestic challenges will emerge by then, enabling LP’s to take concrete steps.
Globally, LP’s in general are shy to commit to new funds and are expected to remain so till uncertainty reduces materially. GP’s on the other hand, are flush with funds with record levels of dry powder. It is expecting significant uptick in PE investment activity in a couple of quarters, or possibly even earlier. A lot depends on the successful containment of the virus, and whether there will be a second wave etc., he added.
Covid-19 has dislocated the fixed income and equity portfolio’s of most LP’s and has caused significant upheaval in the real estate and infrastructure asset classes, which is where a lot of LP’s have significant exposure. In a way, it has caused a perfect storm in the investment world, one which has caused damage across deal strategies, asset classes, investment types as well as geographies. LP’s are taking stock of their exposures, estimating losses, existing commitments, projecting distributions and are expected to wait a bit before they start making fresh commitments to new funds.
EY expects the fund raising activity by India-focused General Partners (GP) to start meaningfully after 3-4 months, and success will most likely be tasted first by experienced fund managers with established track record of delivering returns to LP’s and those that have more than 2 funds under their belt.
Currently, GP’s are bullish on sectors including pharma, healthcare, bio-tech, fin-tech, technology, SaaS, Ed tech, chemicals, packaging, consumer goods in the essentials space and essential services / infrastructure like renewable energy, roads etc.
"As and when lockdown
related challenges ease and normalcy begins to return, we hope to see more sectors being added to this list," said Soni.