Private equity firms that are going through troubled times across the world, have resorted to various alternatives including diversification of their portfolio to adjust to the present economic constraints. PE firms are mainly diversifying into infrastructure assets, debt funds and energy technology investments, as institutional investors believe there would be stable cash flows into these sectors. “I think what you are going to see is a natural evolution of firms taking their networks and their brand into other fields where they can get a return,” global PE and investment advisory firm CVC Capital Partners Partner Marc St John said. PricewaterhouseCoopers in its Global Private Equity Report 2008 has said “private equity firms are taking advantage of financial turmoil to diversify either by buying new investment businesses from within troubled banks or by hiring experienced investment banking executives who can spearhead expansion into new asset classes and geographies.” […]

As the global credit crisis casts its spell on the private equity (PE) firms in India, fund-raising has witnessed a significant dip. India-dedicated firms raised $1.8 billion through five funds in the second quarter of this financial year, down 60% compared to the same period a year ago when 11 funds worth $4.5 billion were raised by PE firms. The total size of the funds raised during 2007 calendar year stood at $8.4 billion, according to a study by Venture Intelligence, a firm that tracks private equity and venture capital in India. […]