Weekly round-up: LP warns need for discipline

Rhonda Ryan of Altius Associates explored the challenges faced by the industry in the wake of a fundraising boom; the industry raised 60% more capital in 2013 compared to the previous year. Writing exclusively for unquote”, Ryan warned of the need to maintain investment and pricing discipline while deploying significant dry powder. Though not quite at 2008 levels, increasing debt availability has led to a frothy feel to the market. However, the pipeline of dealflow has not increased. Writes Ryan: “If exuberance goes unchecked, this could easily translate into higher purchase prices and a market that does not produce the solid returns that it should for investors.”

unquote” analysed Russia’s sky-high inflow of foreign direct investment (FDI) and outlined the possible impact of the crisis in Ukraine. According to Sean Glodek, director at the $10bn Russian Direct Investment Fund, speaking to unquote" in late-February: "International private equity investors have played an important role in driving this upward trend in FDI. Private equity firms see Russia as an attractive investment destination because of its strong fundamentals, including a fast-growing middle-class, disposable income rising by over 50%, low unemployment and key pro-business reforms being implemented.” But will political tensions and European sanctions block future FDI?

Exit valuations for tech companies are on the rise in Israel, suggesting a maturing industry. unquote” asked whether the emerging trend could lay to rest the age-old debate surrounding the size of Israeli exits.  But is the market entering a bubble? "There is nothing that is reminiscent of 2009 today; that was a very different time. Companies are creating tremendous value at a faster pace than ever seen before and I don't think the recent valuation increases mark the start of a new tech bubble," says Adam Fisher, partner at Bessemer.

That's all from me this week but if you have any comments on this week's analysis, please send your thoughts to amy.king@incisivemedia.com.

You can continue to follow me and the rest of the unquote" team via @unquotenews for all the latest private equity and venture capital updates, and of course on unquote.com.

Amy King
Senior Reporter, unquote"

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