The reason behind this strategy is to be found in the nature and development model of the Indian corporations, which, in turn, determine the investment patterns of big and small PE firms. “Considering that large buy-outs are rare in India, and that big money needs big transactions, these are available only in listed companies,” says a Singapore-based hedge fund manager.

But why are listed companies happy to partner with PE funds? PE funds often pay a premium compared to the public markets and endow credibility, since PE firms conduct due diligence and, hence, demonstrate a vote of confidence in the company they choose to invest in. Several Indian companies that have reached a critical mass of scale and now have global ambitions are on the look-out for funds as well as advisory services for overseas acquisitions, expansion and diversification activities. “Promoters know that we are stable investors as we are in for the long haul (with lock-in periods) and, therefore, have an interest in the company,” says Gupta. “Additionally, they can rely on us for advice especially from a global perspective.”