Posted on 27 August, 2020
In an interview with Business Line, Pankaj Raina, Managing Director, Zephyr Peacock India said, alternative investments sentiment will be subdued, funding will slow down by 30-40 per cent in 2020 and recovery is likely in the next 12-15 months.
Below is an excerpt from the post which first appeared on Business Line on 27 August 2020:
Given the outbreak of the Covid-19 pandemic, how would you rate institutional investor sentiment in the next 6-12 months?
Investor sentiment will be subdued and cautious. You will see institutional funding slowing down by 30-40 per cent over the next 6-12 months as compared to 2019. Investors in general would be more careful and follow a risk weighted approach to fund deployment. Existing portfolio companies will take top priority for most funds, with a firm focus on cash conservation to survive longer. Investors will also urge their portfolio companies to hire good quality talent at affordable CTCs, which will be more easily available in these trying times.
Funds will look to invest in businesses with lower cash burn and longer operating runways. Companies with sustainable business models which are unit economics positive, with good margin contribution profiles will take priority for investors. You will see a correction in valuations across the board, leading to higher shareholding for the investors, more governance rights, tracking KPIs actively instead of passively and seniority of rights vs existing investors.
Zephyr Management is a global emerging markets investment manager, specializing in the creation and management of highly focused private equity funds
Since its inception in 1994, Zephyr has sponsored and/or managed 26 investment funds in both public and private securities markets representing approximately $1.2 billion in combined commitments and assets under management
Emerging Markets Focus
The firm has initiated several private equity funds investing in several African countries, South Korea, Mexico, India, and Sri Lanka since its founding. Zephyr's funds serve medium size enterprises that are often ignored by larger private equity players. Zephyr funds provide growth capital to established companies with proven business models and sustainable competitive advantages.
Investment activities are currently focused on India, Sri Lanka and Africa.
Zephyr Peacock India
Zephyr Peacock India provides equity financing for fast growing, small to medium sized companies led by strong entrepreneurs and management teams.Read More
Emerald Sri Lanka Fund
Emerald Fund provides equity financing for fast growing, small to medium sized (SME) Sri Lankan companies led by strong entrepreneurs & management teams.Read More
Zephyr Acorn provides equity
Zephyr Acorn provides equity financing and business support to innovative early-stage companies in East Africa.Read More
Active Portfolio Support
The firm's special expertise lies in bringing global best practices to medium-sized growing companies by assisting them in conceptualizing sustainable business strategy, management development, compensation, ESG, expansion outside of their home country, capital structure and positioning for stock exchange listing or trade sale.