India and the China Factor

Speaking on the LP panel at the 2010 AVCJ India Private Equity & Venture Forum held in Mumbai, Brijesh Jeevarathnam, Director of Commonfund Capital, noted that China’s per capita income of $3,000-plus makes that market “interesting” as the emergence of a disposable income class has created opportunities. India’s per capita income meanwhile, is around $1,000.

Jeevarathnam added that his fund weighs allocations in China and India on a roughly 2:1 scale, and while he doesn’t imagine his fund will invest double the amount of money into India over the next five years, he doesn’t think that investments will decrease. “The velocity of capital is not as fast as in China, except for PIPEs,” he added.

Other LPs on the panel agreed. Nikunj Jinsi, Head & Chief Investment Officer of the International Finance Corporation said that he has seen earlier returns from China that have not been realized in India as of yet. Though capital movement remains a factor, India still remains attractive because China has lured more corporate dollars, leaving fewer investment avenues to explore. The solution in India? To find GPs that can spot emerging trends and industries, said Managing Director of JP Morgan Asset Management’s Private Equity Group Eric Chan.

To boil the market down, Maninder Saluja, Co-Head of Emerging Markets PE, Quilvest, said that India isn’t especially differentiated from other markets – even more sophisticated ones such as the US – aside from the size of funds (smaller) and the stage of investment (earlier). He added that his fund’s breakdown consists of a third of its capital allocated to emerging markets; one-third to the US; and one-third into Europe. Of Quilvest’s emerging markets focus, 25% of that capital has gone to India.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• LPs
• Performance
• International Finance Corporation