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  • Stick to your investment plan even if market is volatile, says Ajay Tyagi of UTI AMC

    Ajay Tyagi, Head of Equity at UTI AMC has advised that new age investors have to avoid timing the market, have an asset allocation plan, follow this plan systematically and stick with it even when things look volatile in the short run.

    Investors trying to change their investment strategy every now and then to make quick money or chase momentum will never be able to create sustainable wealth, says Tyagi who has more than two decades of experience. He manages UTI’s flagship equity scheme in India and is also the Investment Advisor to UTI International’s range of India dedicated offshore funds.

    He expects India to continue trading at a premium to other emerging markets. “The reason for this is India’s long term structural growth, strong demographics, thriving democracy and a very vibrant stock market.”

  • Capricorn Investment Group Takes 20% Stake in Norselab’s European Impact Investment Platform

    OSLO, Norway & NEW YORK–(BUSINESS WIRE)–Capricorn Investment Group makes their first move into the Nordic venture space with their investment in Norselab, an Oslo-based European impact investment manager for private capital.

    “With their thoughtful approach to innovative impact investments, Norselab stands out as an ideal partner to expand our presence into the Nordics and Europe. We are thrilled to help scale their impact investment platform,” says Michaela Edwards, Partner at Capricorn Investment Group.

    Edwards is the partner in charge of the investment into Norselab. The deal, offering Capricorn’s Sustainable Investment Fund a 20% stake in Norselab, relied heavily on their belief in the team and the structure that they have built.

    “The team behind Norselab has an outstanding track record in building and scaling tech companies, in addition to a clear ambition to build a larger ecosystem of funds. These were key factors weighing in on our investment decision,” adds Edwards.

    Both firms share the belief that impact investments will offer the best opportunities over the coming decades. Through investment into companies that target industries in need of transformation, Norselab aims to ignite disruption, and to create potential for solid returns and massive impact.

    Unexplored opportunities in the Nordics

    Capricorn’s investment in Norselab marks its first, strategic move into the Nordics. According to Edwards, the Nordics are still unexplored territory from a global perspective, and offer plentiful opportunities for both impact and high returns. She highlights that Norway, with its ongoing green shift and hunger for innovation, offers a great location from which Norselab can expand to Europe.

    Building system value

    Norselab launched its first impact-focused venture fund, Meaningful Equity I, in 2020. On the back of a solid tailwind in terms of market trends and deal flow, the impact investor is expanding its platform with several new funds. This means a significant upscaling of the organization where creating system value through knowledge sharing is the key to accelerate growth and value creation across the ecosystem.

    Uncompromising on impact

    Tvedt adds that Capricorn’s solid impact profile was decisive for Norselab’s decision to bring on board a larger capital partner.

    “Impact is at the heart of our investment philosophy, and core to the products and services of the companies we invest in. We want to build Norselab into a leading European impact investment platform, and believe Capricorn is a match made in heaven for scaling Norselab while staying true to our fundamental DNA,” says Tvedt.

    With the Sustainable Investment Fund, Capricorn Investment Group aims to back purpose-built investment managers with an authentic vision around impact.

    A fit-for-scale platform

    Norselab’s CEO, Erik Syvertsen, explains how they created an international fund platform for venture investments with the building blocks that most market participants would recognize from larger institutional structures.

    “As we established our first fund, we knew that a robust infrastructure with scalability would be essential if we were to have international ambitions both in terms of deal flow and the ability to attract capital. Capricorn recognized the value in the ecosystem we are aiming to build in and around Norselab. It’s a privilege for us to work with a capital partner that is aligned with our values and ambitions across the board,” says Syvertsen.

    Norwegian capital partners joining the party

    Two significant Norwegian capital partners are also part of the deal. Long-term Norselab investor Ness, Risan & Partners, invests in the impact investment platform to offer Norselab’s attractive impact products to their large Nordic customer base. Joakim Lehmkuhl is also among the new capital partners. His connection to international investor groups will give the Norselab team solid traction to scale its platform out of Norway.

    About Capricorn

    Capricorn is one of the largest mission-aligned firms in the world, and has since its inception in 2000 grown to manage more than $10 billion in multi-asset classes for foundations and institutional investors, through their range of impact-focused fund products. Their Sustainable Investors Fund (SIF) is a private equity partnership whose investment objective is to create significant value through ownership and early stage investment in public and private asset managers who incorporate sustainability as a key driver of investment returns

  • Industrial and logistics sector top investment chart in 2021, touch new highs

    The industrial and logistics sector was the most sought-after, and investments rose to a five-year high of $1.1 billion, a five-fold increase from 2020.

    The sector has been drawing strong operator and investor interest due to increased demand from e-commerce and 3PL players post-pandemic.

    This growth momentum is likely to continue in 2022, as major global investors and developers continue to expand their footprint in proximity to high consumption areas across Tier I and II cities, said Colliers.

    “The pandemic has accelerated several structural trends and will have lasting changes on the nature of real estate business in India. The Investments across asset classes saw promising inflows in 2021, reflecting several opportunities for investors to recalibrate their strategy towards growth sectors. This is already evident in the rapid investment being allocated towards the residential, increasing development of data centres, alternatives, industrial, office, and the evolution of the life science sector. There is a reflection of confidence in the industry to participate in the growth story and hence develop, build and own real assets in the long term.” said Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India.

    Overall the real estate institutional investment volumes closed at $4 billion in 2021, a 17% dip yoy. However, capital flows came on a broad-based recovery across most asset classes, geographies and doubled in the number of deals compared to 2020, mentioned the report.

    The industrial and warehousing sector accounted for half of 2021 investment, while the office sector attracted the highest investments at $1.2 billion, accounting for 31% of the total investments in 2021. This reaffirms the resilience and the long-term growth story of the sector.

    “The year 2021 has seen a strong investor appetite for residential and industrial & logistics sectors while office continues to be dominant. The broad-based recovery signals signs of ebullience amongst investors and expansion of REITs, asset diversification, imminent potential in industrial & logistics will keep them busy in the Indian market. Moreover, niche asset classes such as Data centers, student housing and life science will provide a unique opportunity for investors to diversify their investments.” said Vimal Nadar, Senior Director and Head of Research, Colliers India.

    The report mentioned that the Inflows in the residential segment witnessed a significant uptick with a two-fold increase YoY amid a recovery in the residential sector and increased demand for capital. Private Equity funds are looking at providing capital for fresh investments in residential projects, and also for refinancing/restructuring existing loans of banks and NBFCs. The luxury segment accounted for about 35% of the total investments, with the rest in mid-income and affordable category projects. Luxury residential projects witnessed increased investments in 2021 as demand for bigger homes and gated communities has significantly increased during the past one year.

    As compared to last year, the share of single city deals witnessed a two-fold increase during 2021, indicating investors’ rising preference towards specific high-quality assets in key locations. With increased investments in select luxury residential projects and data centres, Mumbai led the investment pie in 2021 with a 20% share. Foreign private equity investors continued to have the majority share in the investment volumes, but domestic funds have shown higher confidence, compared to last year, led by a steady recovery in the economy.

  • Economists feel an uptick in investment and demand in FY23 will broad-base growth

    The economic recovery is likely to be broad-based and more durable in the next financial year as Covid-battered micro, small and medium enterprises (MSMEs), informal industries and contact-intensive services see a pick-up in capital investments and healthier balance sheets due to revival in demand, say economists. The resurgent Omicron variant, persisting shortages and bottlenecks, and worldwide divergence in policy stances due to inflationary pressures remain a concern, they say.

    “While we are watchful of the economic impact of global spread of Omicron, we are cautiously optimistic economic recovery in India will be more durable and broad-based in the coming year,” said Aditi Nayar, chief economist, Icra NSE 0.37 %.

    The International Monetary Fund (IMF) projected an 8.5% growth for India in FY23 in its October review last year. Overall economic growth is likely to be impressive in the current financial year, statistically boosted by the low base of 7.3% contraction in FY21. The Reserve Bank of India has forecast a 9.5% real GDP growth in the current fiscal, which should be a 1.6% rise over pre-Covid FY20.

    “We also expect broad-basing of growth, with rising contributions from the services sector. Government support has put investments on a stronger footing vis-a-vis private consumption, which is currently fragile,” said Dharmakirti Joshi, chief economist, Crisil.

    MULTIPLE DRIVERS
    Next fiscal could see both investments and consumption drive growth, with exports providing a helping hand. Rising consumption will push capacity utilisation above the crucial threshold of 75% by the end of 2022, which should trigger a broadbased pickup in private sector investment activity, said Nayar. Private consumption — the biggest GDP component — rose by over 8.6% in the second quarter of the fiscal but is yet to cross pre-Covid levels. If the economic recovery continues, private consumption is expected to rebound, too.

    An expected solid expansion in taxes will allow the government to prioritise growth-enhancing capital spending, which is also expected to crowd in private investment. The new tech ecosystem, asset monetisation and expansion of productionlinked scheme are among key drivers that could offset the potential demand slowdown.

    AND HEADWINDS
    The rapid advance of Omicron in the metros remains a concern as it could disrupt the economic recovery. However, economists are optimistic that its impact would not be so severe amid indications that the variant may spread faster but is not likely to be as damaging as earlier ones.

    “Omicron as a wildcard entry has tilted risks to outlook downwards.

    Experience tells us that successive waves, even if they overwhelm the health infrastructure, are less damaging to the economy,” said Joshi. Other risks that could weigh on growth include actions of the US Federal Reserve and other central banks, and domestic inflation dynamics. A rapid rise in US interest rates could disrupt financial markets.

    “Rising input prices (WPI) is bound to find its reflection on retail prices (CPI). This, along with higher deficit, will increase interest. However, exports is a ray of hope, said Devendra Pant, chief economist, India Ratings.

    Economists ET spoke to expect RBI to raise the repo rate by 50 basis points starting next financial year. Another concern is high crude and commodities prices, which could cause a faster-than-expected rise in interest rates if inflation accelerates.