.
In case, US President Barack Obama‘s proposal to curb the role of commercial banks in hedge and PE funds is implemented, then fund-raising could indeed become a very tough task for Indian private equity players.
.
But at the same time, the move could help Indian funds take part in more deals, market players insist.
.
Obama has proposed to bar commercial banks from owning, advising and investing their own capital in PE and hedge funds.
.
Though most investors in Indian PE funds are university funds, endowment funds, pension funds, insurance funds and institutional investors, the industry expects the move to impact fund-raising in the long term and in big way, as banks will be barred from taking part in these funds.
.
A large number of venture capital and PE funds of US-based commercial banks had reduced their exposure to India during the economic slowdown.
.
Though few big ones like Goldman Sachs, Merrill Lynch etc; stayed back in the market.
Indian PE players hope to get more deals if these players vacate the market.
.
Market experts do not see any significant impact in the coming few months, but cannot deny that a slowdown in USA market will surely impact the Indian private equity industry.
.
They feel that any curbs on banks would make fund-raising a very difficult task since banks were the biggest contributors of funds.
.
Industry players say the focus will shift from funds of banks to fund of funds, pension funds, and university and endowment funds.
.
Recent Comments