Private Equity

India - Private equity inflow into SMEs drops by 32%

Source: Business Standard, 08 December 2009

The flow of private equity investment into India's small and medium enterprises declined by 32% to US$654.5 million in January-November 2009, compared with US$962.5 million in January-November 2008. The number of deals declined by 37% to 80 deals in January-November 2009, from 127 deals in the year-ago period.

According to data compiled by Venture Intelligence, about US$191 million of the total private equity investment was invested in the IT/ITeS sector, compared with US$388 million in the year-ago period. The number of deals in the IT/ITeS sector declined to 32 from 61 deals. Telecom attracted US$111 million in January-November 2009, compared to just US$7 million in January-November 2008.

China - Private equity, venture capital investment falls

Source: Dow Jones, 09 December 2009

Investments in private equity and venture capital in China fell sharply in the January-November period because of the global financial crisis. According to market research firm Zero2IPO, private-equity investments in the January-November period fell 12.3% from a year earlier to US$8.43 billion. Venture capital investments, including those by foreign firms, totaled 425 in the period, compared with 607 for all of last year.

Venture capital funds denominated in the Chinese yuan invested US$1.09 billion in the January-November period, accounting for 45.5% of all venture capital investments in China during the period, up from 33.1% for all of 2008. The proportion of investments by foreign currency-denominated funds, fell to 54.5% from 66.9% for all of last year. Zero2IPO expects this trend to continue because local firms have better connections in and knowledge of the local market and they aren't subject to the same restrictions on fund raising and investment as foreign-invested fund firms in China.

China - SME-focused fund launched

Source: Greater China Private Equity Review Daily, 15 December 2009

A venture capital foundation aiming to raise money for China's small businesses has been launched. The China Association of Small and Medium Enterprises has picked Shenzhen Junsheng Capital as its partner to launch the Zhongfa Junsheng (Beijing) Investment Management Co. Ltd. Small businesses in China have suffered limited financing sources as the nation's commercial lenders preferred state-owned enterprises and large key projects.

In its first closing, the fund aims to raise RMB1 billion (US$147 million), and an additional RMB2 billion will be raised later. Private offering will soon start and minimum commitment is RMB 50 million. The Ministry of Finance and Ministry of Science and Technology will be key investors, while banks, insurance and securities companies will also invited to join the mission.

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