Private equity (PE) and venture capital (VC) investments in 2018 aggregated to $35.1 billion, surpassing the previous high of $26.1 billion recorded in 2017 by 35% on the back of significant growth in large deals, according to EY’s Private Equity Monthly Deal Tracker.
As many as eight $1-billion-plus deals were recorded in 2018 alone compared with 11 such deals in the previous 12 years combined. Also, 2018 witnessed PE/VC exits at $26 billion in value, almost equal to the value of exits in the previous three years combined.
Exits touch new highs
Talking about the PE landscape, Vivek Soni, partner and national leader — private equity services, EY said,“2018 has been the best year for PE/VC investments and exits. As forecasted by us in the beginning of the year, both PE/VC investments as well as exits have touched a new record high in 2018. Though volatility in broader markets dampened investments in the second half of 2018, this was more than adequately compensated by an uptick in buyout and start-up activity.”
PE/VC investments in India in 2018 witnessed a sharp increase in the value on account of some very large deals (12 deals of value $500 million or greater, including eight $1 billion plus deals).
In 2018, investment deal volume increased 28% (761 deals compared with 594 deals in 2017). The growth was led by strong pickup in buyouts and start-up investments. The data includes deals that are announced but are awaiting closure on account of regulatory approvals like the PE funded UPL-Arysta deal, Samara-Aditya Birla Retail deal.
The year was also the best year-ever for exits. In 2018, PE/VC exits, at $26 billion, increased by almost 100% compared with 2017 and are almost equal to the value of exits in the previous three years combined. The sharp rise was mainly on account of a single large deal that saw Walmart acquire controlling stake in Flipkart for $16 billion from a clutch of investors, including Softbank, Tiger Global and others. This is the largest deal in the Indian PE/VC market ever.
As much as $8.1 billion was raised by PE/VC funds, a 40% increase over 2017 and the highest-ever. Similarly, the fund-raise plans announced stood at $22.3 billion which, again, is the highest ever. This further reiterates the underlying trend, reflected in both investments and exits, of India’s improving attractiveness for global PE/VC funds as the domestic PE/VC ecosystem flourishes.
