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.
Click here to read the full article on ‘Business Line’
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 MoreEmerald 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 MoreZephyr Acorn provides equity
Zephyr Acorn provides equity financing and business support to innovative early-stage companies in East Africa.
Read MoreActive 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.