How global investors view India

"Why do you Indians have the spectacular abi-lity to mess yourself up?" asked one of the world's most respected CEOs of one of the largest global private equity (PE) funds recently. Likewise another one of his ilk remarked: "We see policy change in every major country in the world when the government changes, but in no other country does policy flip-flop happen even without a change in government!!" According to yet ano-ther peer, "India is too slow for us to do things in one lifetime".

Coller Capital's Global Private Equity Barometer 2013 avers that limited partners (LPs) will almost definitely reduce their exposure to India. This is the distinct feeling one gets while speaking to many of them as well. To be fair, this is not solely because of the difficulty of doing business in India but also because many of the private equity firms have overpaid for assets, general partners (GPs) are working more for management fees than for carried interest, exits have been limited and in general most PE firms are poorly organised.

As such, the industry as a whole is in a supreme mess in India and PE 1.0 is winding towards a long, tortuous end. With global multi-billion franchisees, for any distinguished PE firm such as a Carlyle, an Apollo, an Advent, a Blackstone, or a General Atlantic, the risk of partnering with corrupt entrepreneurs is a clear and present danger. Even more worryingly for them this risk is asymmetric. To see More