From origination to exit, how much value can your capital create? · 2019-11-07 · The US$3.7 billion Brookfiled-Relaince Jio deal was the largest deal in July 2019 followed by Baring

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The IVCA-EY monthly PE/VC roundup –

July 2019

From origination to exit, how much value can your capital create?

Page 2 20 August 2019 EY analysis of VCCEdge data

Our thoughts

“PE/VC investment activity in India has continued with the strong momentum built up in

1H19. The US$8.3 billion worth of PE/VC investments in India in July 2019 is the highest

value of monthly investments by PE/VC funds ever recorded, eclipsing the previous

historical monthly high of US$7.1 billion invested in March 2019. Yet again, this strong

performance has been driven by mega deals in the Infrastructure sector (US$4.7 billion

investments in July 2019). With this, the year to date cumulative PE/VC investments in

the Indian infrastructure sector add up to US$12 billion, which is greater than the total

investments received by the sector in previous seven years put together.

As projected by us in the beginning of the year, ready, yield generating infrastructure

assets have become an attractive investment class for global buyout, pension and

sovereign funds, giving an opportunity to infrastructure developers to monetize part of

their holdings and free up capital for funding greenfield infrastructure development and

deleveraging. It is worth noting that PE/VC investments in Indian infrastructure in year to

date 2019 exceed the total PE/VC investment made in the next three largest sectors

(financial services, real estate and technology). On the back of these mega PE/VC

investments in Indian infrastructure we are already at 90% of the historical high PE/VC

investments recorded in 2018. 2019 is well on its course to be the best year for Indian

PE/VC investments.

Over the next 12 months or so, the emerging theme to watch out for is the ‘Special

Situations’ investment class, wherein we project PE funds with a stressed assets strategy

to pick up activity considerably.”

Vivek Soni

Partner and National Leader

Private Equity Services

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Monthly trend analysis – July 2019

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Investments

► PE/VC investments in July 2019 were 4.7 times the value recorded in July 2018 and 2.2 times compared to June 2019 (US$8.3 billion in July 2019 vs. US$1.8

billion in July 2018 and US$3.8 billion in June 2019). The growth in investments was driven by improvement in deal activity across asset classes (i.e., pure play

PE as well as infrastructure and real estate). In terms of value, July 2019 recorded the highest monthly deal value ever, 18% higher than the previous high of

US$7.1 billion recorded in March 2019. In terms of number of deals, July 2019 recorded 51% higher deals compared to July 2018 and 15% higher compared

to June 2019 (106 deals in July 2019 vs. 70 deals in July 2018 and 92 deals in June 2019).

► Investments in infrastructure and real estate asset classes accounted for 56% of the total PE/VC investments in July 2019, recording the highest ever value of

monthly investments at US$4.6 billion, mainly on account of the large US$3.7 billion buyout of Reliance Jio’s tower assets by Brookfield. This deal is also the

largest ever investment made by a PE/VC fund in India, surpassing the US$2.5 billion investment made by Softbank in Flipkart in 2017. The year-to-date

investments in the infrastructure sector in 2019 have reached US$12 billion, making it the largest sector for PE/VC investments in 2019, which is higher than

the total investments made in the next three largest sectors of financial services, real estate and technology put together.

► July 2019 recorded 14 large deals (deals of value greater than US$100 million) aggregating US$7 billion compared to three large deals worth US$402 million

in July 2018 and nine large deals worth US$2.7 billion in June 2019. Five out of the 14 largest deals in July 2019 were in infrastructure and real estate sectors.

The US$3.7 billion Brookfiled-Relaince Jio deal was the largest deal in July 2019 followed by Baring PE Asia’s US$800 million buyout of Citius Tech.

► In terms of deal type, buyout deals recorded the highest value of investments at US$4.7 billion across five deals, compared to just two deals worth US$100

million in July 2018 followed by growth investments worth US$1.5 billion across 25 deals and private investment in public equity (PIPE) investments at US$1.5

billion across 11 deals. Start-up investments aggregated to US$583 million across 58 deals, accounting for 55% of the total number of deals in July 2019.

Key trends


Exits

► July 2019 recorded 10 exits worth US$635 million, 60% higher compared to the value of exits in July 2018 (US$397 million), however 38% lower compared to

June 2019 (US$1 billion). Secondary exits in July 2019 were highest at US$395 million across two deals followed by open market exits worth US$144 million

across three deals.

► The largest exit in July 2019 saw General Atlantic sell its 32% stake in Citius Tech to Baring PE Asia for around US$389 million.

► Technology sector recorded the highest value of exits worth over US$389 million across two deals.

Fund raise

► July 2019 recorded total fund raises of US$545 million compared to US$257 million raised in July 2018. The largest fund raise in July 2019 saw TVS Capital

raise its third fund of US$160 million. PE/VC funds also announced fund raise plans worth US$623 million in the same month.

Key trends

Investments (cont’d.)

► From a sector point of view, infrastructure was the top sector in July 2019 with US$4.4 billion in investments due to the large Brookfield-Reliance Jio deal.

Technology sector was second in line with investments worth US$1.1 billion that includes Baring PE Asia’s deal worth US$800 million.


PE/VC monthly headline trends: investments

1,790 3,891 4,022

3,336

1,801

3,187

1,777

2,949 7,084

4,445 3,719 3,799

8,329

7059 62 64

6972

88

63

91109 98

92106

0

20

40

60

80

100

120

-

2,000

4,000

6,000

8,000

Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19

Total PE/VC investments

Value (US$m) # of deals

1,317 2,999 3,648

2,773 1,066

2,804 1,650 1,729

3,505 2,889 1,332 1,183

3,692 472

360 11

378

723

363

127 419

928 369

1,107 935

284

-

532 363

185

12

21 802

2,651

1,188 1,281 1,682

4,353

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000


PE/VC investments: split across asset classes

PE/VC investments (other sectors) (US$m) Real estate (US$m) Infrastructure (US$m)

US$m

#US$m

US$m


397

1,591

1,364

676 381 331 472 389

1,174

739 1,019

635

12

20

9

13

118

1310

1315

11

15

10

0

5

10

15

20

25

-

1,000

2,000

3,000


Total PE/VC exits

Value (US$m) # of exits

377

1,588 1,292

393 381 331 381 256

972 739 916 548 13

71

283 80

92

201

7 133

104 87

-

1,000

2,000

3,000


PE/VC exits - split across asset classes

Other sectors (US$m) Real estate (US$m) Infrastructure (US$m)

US$m

PE/VC monthly headline trends: exits

16,029

16,029 #US$m

US$m


257

2,063

288

641

398

1,440

2,469

285 40

682 1,096

971

545 5

9

3

5

3 3

10

3

1

4

65

4

0

2

4

6

8

10

12

-

1,000

2,000

3,000


Fund raise

Total funds raised (US$m) Total # of funds raised

#US$m

PE/VC monthly headline trends: fund raise


509

248

401

635

773

1,127

Others

Automotive

Retail and consumer products

Media and entertainment

Financial services

Technology

Top sectors by value US$m

31

8

8

11

17

21

Others

Retail and consumer products

Food and agriculture

E-commerce

Technology

Financial services

Top sectors by volume

PE/VC investments: US$3,692 million over 96 deals (excluding infrastructure and real estate investments)

126 (40) 147 (10)362 (10)

502 (6)

2555 (9)

<US$10m US$10m-

US$20m

US$20m-

US$50m

US$50m-

US$100m

>US$100m

Deal value US$m (volume)

155 (7)

800 (2)

1453 (11)

532 (56)

753 (20)

Credit

investment

Buyout PIPE Start-up/

Early stage

Growth

capital

Deal type US$m (volume)


4 (2) 72 (2) 100 (1)

4462 (5)

<US$10m US$10m-

US$20m

US$20m-

US$50m

US$50m-

US$100m

>US$100m


4,353

284

Infrastructure

Real estate

By value US$m

5

5

Infrastructure

Real estate

By volume

Infrastructure and real estate investments: US$4,637 million over 10 deals

NA (NA)

3870 (3)

NA (NA) 52 (2)

716 (5)

Credit

investment

Buyout PIPE Start-up/

Early stage

Growth

capital

Deal type US$m (volume)


Company PE investors Sector Stage US$mStake

(%)

CitiusTech Healthcare Technology

Private LimitedBaring PE Asia Technology Buyout 800 80

Zee Entertainment Enterprises

Limited

Invesco Oppenheimer

Developing Markets Fund

Media and

entertainmentPIPE 613 11

Future Lifestyle Fashions Limited Blackstone

Retail and

consumer

products

PIPE 250 7

Ola Electric Mobility Private

LimitedSoftBank Automotive Growth capital 248 NA

Think and Learn Private Limited

(Byju’s)

The Qatar Investment

Authority, Owl VenturesEducation Growth capital 150 NA

Top PE/VC investments

Top PE/VC investments excluding infrastructure and real estate in July 2019


Company PE investors Sector Stage US$mStake

(%)

Reliance Jio Infocomm Limited,

Tower armBrookfield Infrastructure Buyout 3,660 NA

Greenko Energy HoldingsGIC, Abu Dhabi Investment

Council

Power and

utilitiesGrowth capital 392 NA

L&T IndInfravit Trust -Sadbhav

Infrastructure Project Limited

Canadian Pension Plan

Investment Board (CPPIB)Infrastructure Growth capital 200 NA

Mars Enterprises and Hospitality

Ltd (Real estate asset)Brookfield

Real estate,

hospitality and

construction

Buyout 109 NA

L&T Realty Limited, Office

building in Mumbai Business

Park

Blackstone

Real estate,

hospitality and

construction

Buyout 101 100

Enzen Global Solutions Private

Limited

Greater Pacific Capital

PartnersInfrastructure Growth capital 100 NA

Top infrastructure and real estate investments in July 2019

Top infrastructure and real estate investments


NA (1) NA (1)

97 (2)

395 (3)

144 (3)

IPO Buyback Strategic Secondary Open market


9 (1)

68 (1)

73 (1)

87 (1)

389 (2)

Logistics

Retail and consumer

products

Financial services

Real estate, hospitality and

construction

Technology


Exits: US$635 million across 10 deals in July 2019

Exits in July 2019


Top exits

Top exits in July 2019

Company Sector Sellers Buyer Exit type US$mStake

(%)

CitiusTech Healthcare

Technology Private

Limited

Healthcare General Atlantic Baring PE Asia Secondary 389 32

Berggruen Hotels Private

Limited (Keys Hotel)

Real estate,

hospitality and

construction

Berggruen

Holdings

Fleur Hotels

Private LimitedStrategic 87 100

SBI Life Insurance

Company LimitedFinancial services KKR NA

Open

market73 1

Page Industries Limited

Retail and

consumer

products

Cartica Capital NAOpen

market68 2


Status Fund US$m Strategy

Raised TVS Capital 160

Finance services, business

services and niche consumer

services

Raised Investcorp 145Consumer, financial services and

healthcare

Raised Alteria Capital 140 Venture debt

Raised Dubai Startup Hub 100

Blockchain, Artificial Intelligence

(AI), Machine Learning (ML), and

Big Data Analytics

Fund raise

Top fund raise/announcements in July 2019

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EY has been working with the private equity industry for more than 25 years, with approximately 25,000 seasoned professionals worldwide dedicated to the industry and its business

issues. EY serves 74% of the top 300 PE firms included in the Global PEI 300 firms list. Private equity firms, portfolio companies and investment funds face complex challenges. They

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Worldwide, our 247,570 people across 150+ countries and 700+ cities are united by our shared values and their unwavering commitment to quality.

► EY’s India Private Equity Services Practice has been among the top advisors for private equity deals over the past ten years. EY has been awarded the “Most Active Transaction

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advisor in the Venture Intelligence league table in 2018.

► EY’s India Private Equity Services Practice provides value to PE funds and their portfolio companies through its deep sector and service expertise. EY India is organized around key

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About IVCA

About IVCA

The Indian Private Equity & Venture Capital Association (IVCA),

is the apex body promoting the Alternative Investment Funds

(AIFs) in India and promotes stable, long-term capital flow

(Private Equity (PE), Venture Capital (VC) and Angel Capital) in

India.

With leading VC/ PE firms, institutional investors, banks,

corporate advisers, accountants, lawyers and other service

providers as members, it serves as a powerful platform for all

stakeholders to interact with each other. Being the face of the

Industry, it helps establish high standards of governance,

ethics, business conduct and professional competence.

With a prime motive to support the ecosystem, it facilitates

contact with policy makers, research institutions, universities,

trade associations and other relevant organizations. Thus

support entrepreneurial activity, innovation and job creation.

Rajat Tandon

President, IVCA

E: [email protected]

Aakriti Bamniyal

Senior Vice President, IVCA

E: [email protected]

Contacts

From origination to exit, how much value can your capital create? · 2019-11-07 · The US$3.7 billion Brookfiled-Relaince Jio deal was the largest deal in July 2019 followed by Baring

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