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March 22, 2008

"The PE Guys Have Lost Money! Ha! Ha! Ha!"

This morning, I saw yet another article on how PE firms, which have made investments in listed companies, are now sitting on significant paper losses. These days, such articles have a tendency to break out in one business publication after another (and sometimes even in the same one!) whenever there is a stock market correction.

I'm puzzled by these types of articles and the motivations of folks who write them. After all, while no investor likes to make losses (on paper or otherwise), why should PE firms - which are required (by their investors) to make investments with a 2-5 year outlook - be bothered about 2-5 month returns? And, unlike mutual funds, no "small investor" in India is exposed to PE funds (so, there's no case for "public interest" that gets served by such articles).

Maybe such articles get written because they can pass off for some brainy analysis and get played up on the front page? Whatever the reason, they have become EXTREMELY BORING. And, I hope editors of these publications ask their writers to come up with better story ideas when the next stock market correction strikes.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.