India: PE exits hit peak in last three years, clocking 48% in deal value since 2003

The pace of exits for the Indian private equity industry accelerated in the last three years, with the period contributing to almost half of the exited capital since 2003, said consulting firm McKinsey and Co.

“In 2015, private equity had an overhang of unexited investment. Since then, the pace of exits has grown significantly, to $10.8 billion in 2017—a tenfold growth since 2009,” Mckinsey said in its report titled Indian Private Equity: Coming of Age.

“In fact, 48% of all exits since 2003 (by value) took place in the past three years,” it said.

Sales to strategic buyers comprised almost a third of exits (measured by value) from 2015 to 2017, the period under consideration in the report.

“This finding underscores the influence private-equity investors wield over exit approaches and timing to capture value, reposition portfolio companies as attractive acquisition targets, and steer other owners and investors through an exit process,” said McKinsey in its report.

Buoyant markets have recently facilitated sales to the public, it said, adding that these sales grew 1.5 times from 2015 to 2017 compared with 2011 to 2014, although such exits claimed a slightly lower share than they did over the longer period of 2003 to 2014.

In recent years, the industry has focused efforts on exits and returned more capital to investors than in previous years.

Capital calls exceeded distributions in 2017, although distributions have grown over the past five years, it said.

The increased pace of exits has also arrested the growth of unexited capital, according to the report.

The value of investments not yet exited in 2017 stands at 4.6 years of investment—falling from its peak of 6.2 years in 2014, said McKinsey.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.