Zephyr Peacock India Aims to raise $200M Amid Funding Winter

Despite the ongoing funding challenges, there remains a keen interest among global investors in India's private markets. Zephyr Peacock, a New York-based global investment manager, aims to secure $200 million from both domestic and international investors in the coming months. The primary source of this funding is expected to be from North America. Mohit Gulati, President and Chief Investment Officer of Zephyr Peacock India, acknowledges the difficulty in raising such capital without specific investments in mind. However, he highlights India's strong appeal, mentioning that pension funds and significant endowment funds globally possess substantial capital reserves and are actively considering investment opportunities in the country.

Gulati, an advocate for Indian investment on the global stage for nearly two decades, notes that despite previous concerns about India's size and inconsistent returns in the private sector, the country's importance on the global stage has significantly increased. He suggests that India is now more integral to the global landscape, making it more feasible to attract investors.

The potential for India's private market has expanded, particularly due to China's reduced global engagement. However, investors are now more cautious about supporting practices that were prevalent during the pandemic. China has witnessed a significant decline in foreign direct investments, hitting a 25-year low, and its influence on the MSCI All Country Index has also notably decreased. In contrast, India's weightage in the index has risen, indicating growing investor interest.

Global investment funds possess substantial capital reserves, amounting to billions of dollars, and with the slowdown in China's global participation, the world is turning towards alternative destinations like India for economic growth and investment opportunities. Gulati points out that the decline in China's investments, including private equity, venture investments, and foreign direct investments, has piqued the interest of Western investors in India. The news surrounding India's digitization efforts and its consistent 6-7% GDP growth has further captured global attention. With some successful exits in the market and a better understanding of India's landscape, Gulati is optimistic about attracting investors to their strategies.