3Q ’22 PE/VC Investments 68% Lower Than In 3Q ’22: IVCA-EY Report

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According to the IVCA-EY monthly PE/VC round-up, 3Q 2022 recorded investments worth $8.3 billion across 238 deals, including 16 large deals worth $5.1 billion. Exits recorded US$4.4 billion across 61 deals in 3Q’22, including open market exits worth $2.3 billion.

3Q 2022 saw $1.7 billion in fundraise compared to $3.4 billion raised in 3Q 2021 and $5.3 billion raised in 2Q 2022. 3Q22 recorded the lowest level of fundraising in the past four quarters. The largest fundraise in 3Q 2022 saw Lightspeed raised its fourth fund of $500 million, its largest fund dedicated to India and Southeast Asia. The fund will focus on seed to series B investments with cheque sizes ranging from US$500 K to $15 million.

Blackstone was the largest investor in the period reviewed (2017-2022), deploying over $5.3 billion, followed by Brookfield and GIC, each deploying over $4 billion.

PE/VC exits were also lower by 48 per cent on a y-o-y basis and by 20 per cent sequentially in the absence of large strategic and secondary deals. The decline in exits was across all deal segments, with IPOs recording the sharpest fall, followed by secondary and strategic exits. Secondary exits with $1.2 billion recorded a 65 per cent (y-o-y) decline and strategic exits recorded $739 million, a 32 per cent y-o-y decline.

PE/VC investments in 3Q 2022 were 68 per cent lower than in 3Q 2021 and 55 per cent lower than 2Q 2022. 3Q 2022 recorded the lowest quarterly value of investments since 1Q 2020 when the COVID-19 pandemic hit.

Startup investments, with $2.8 billion invested across 160 deals, recorded a 73 per cent decline and buyouts at $2.6 billion across 14 deals recorded a 59 per cent year-on-year (y-o-y) decline.

In the previous decade, the real estate sector was the third largest sector behind financial services and infrastructure for PE/VC investments, with US$34 billion invested across 556 deals. In the recent past, since 2017, $31.6 billion has been invested in the real estate sector with more than 50 per cent being invested in commercial real estate. In 2022, the real estate sector has recorded $4.5 billion in investments to date and is expected to remain among the top sectors for the year.

However, the infrastructure sector received maximum PE/VC investments in 3Q 2022 at $2.6 billion across 12 deals, a 63 per cent increase y-o-y. The traditionally favourite sectors like technology and e-commerce recorded 88 per cent and 96 per cent decline in PE/VC investments, respectively.



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