Private equity investments in listed firms are still suffering loss of as much as $0.45 billion so far this year, even though there has been a strong rally in the capital markets, a study says.
The total investments through PIPE deals in the year 2008 was of $1.67 billion and despite the recent rally in the capital market their current mark to market (MTM) value stood at $1.22 billion.
"The PIPEs of 2008 are still posting MTM loss of 26.85 per cent or an absolute loss of $0.45 billion," domestic brokerage firm SMC Capitals said in a report adding, there is still no respite for private equity investors even from their PIPE investments of 2008.
"Despite recent healthy bounce in capital markets in 2009, PIPE investments into any of the industries are yet to come above-the-water. This signifies how deep the losses were in 2008," SMC Capitals equity head Jagannadham Thunuguntla said.
The stock market has bounced back about 93 per cent form its 52-week low level of 7,697.39 achieved on October 27, 2008. At the end of today's trading the 30-share benchmark index was trading at 14,875.52.
However, Thunuguntla said there has been a very good comeback by PIPE deals, but it requires some more rally in the capital market to bring it back to the profit zone.
