PEs Move Concentration From Real Estate Sector

Uncertainty in the equity market seems to be paving the way for newer investment opportunities. Private equity (PE) players have been quick to recognize these. Of late, their attention seems to have shifted from the most-talked about sectors like real estate and financial services, which were the flavour of the season till some time ago, to sectors like education, healthcare, defence, logistics, warehousing and infrastructure.

These ‘not so talked about’ sectors are now attracting big private equity players. Though some of these are the very basic sectors of the economy, it is only recently that investment interest has found a place in them.

The key reason is the underlying growth potential of these sectors. As compared to developed economies, India has been lagging far behind in the development of basic sectors like education, health-care and basic infrastructure. If the Indian economy is to grow at the rate of 9%, the government will have to focus on these key sectors. Hence, it makes good business sense for investors to catch them when they are young.

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  1. Posted October 23, 2008 at 2:43 am | Permalink

    Developers such as Unitech, Peninsula Land, HDIL and Future Capital, the financial services arm of the Future Group, are in talks with investors including some leading private equity funds for raising investments for their projects, after the collapse of Lehman Brothers, whose third party fund, Lehman Brothers Real Estate Partners had committed an investment of over $ 1 billion to these companies. Even the private equity players are equally upbeat about property investments. Mr. Bharath Banka, Chief Executive of Aditya Birla group’s private equity division, “The current credit crisis, which is expected to continue for a few more months, opens up avenue for private equity firms to make large investments in the real estate sector. Long term returns will be higher in real estate for investments made during this point of economic cycle.”For more view-

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