Readings: PE Firms exit, Deconstructing the Fed cut, Economist on Securitisation
Private equity investors have pushed through exit transactions in India worth $534.7 million (Rs2,133.5 crore) in the first nine months of 2007, just a few notches short of the $589 million worth of transactions concluded in all of last year.
The top firms to watch out for in terms of exit activity in the remaining three months of 2007 and further into the first six months of 2008 include Actis Capital Llp., ICICI Venture, ChrysCapital Investment Advisors India, IL&FS Investment Managers Ltd, Warburg Pincus, CVCI and General Atlantic Llc.
- Ajay Shah: Three perspectives on the US Fed rate cut
We need to establish Y V Reddy as our central banker and not Ben Bernanke. There are many uncertainties in how things will play out. Capital flows could surge into the country, in response to the falling dollar, or they could reverse themselves if there is a global flight to safety. In either case, RBI needs to refrain from trading in the currency market; it must not run a pegged exchange rate.
- Economist: Securitisation - When it goes wrong
Wall Street has every reason to shovel securitised debt out as fast as it can. The loan-origination platform has high fixed costs, so it is a scale business. This can lead to trouble when there are not enough creditworthy new borrowers, as in subprime lending. Banks may be tempted to keep feeding the machine at the expense of laxer lending standards. “Once you get into it, it’s a bit like heroin,” says Joseph Mason, an academic who has written on securitisation. When AAA paper is repeatedly compared to Class A drugs, you know something is wrong.
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