Andhra Pradesh - Hyderabad

‘Saving habit saved economy’

HYDERABAD: “Great savings habit” among people and “strong fundamentals” have saved Indian economy from going out of gear, though it was impacted by the global economic meltdown.

Though a few sectors are impacted due to the slowdown, the economy did not shatter in India due to its strong “conservative and regulatory” regime, said John P. Rampon, Managing Partner of Chicago-based private equity (PE) fund McNally Capital, in an interview here on Saturday.

He wasn’t surprised by the move of the US Department of Treasury to offer credit bailout package directly to consumers. “After all, the US economy is consumer centric and the move complements the efforts already underway.” In the wake of the global economic slowdown, how are the PE funds poised towards investments? Apparently, they were not averse to the idea. A few families, having surplus funds, too were toying with the idea of investing in companies through PE route, as the equity markets had taken serious drubbing.

McNally, with a fund size of US $ 75 million, invested a third of its funds in India, including a couple of service industries in the city and a few others in to biotechnology and food processing firms outside the State. The remaining fund was invested in companies in the US.

Opportunities were aplenty in biotechnology, services, healthcare, food processing, retail and a host of other industries.

Mr. Rampon said McNally had at least US $ 1 billion at its command, as its 100 member families, each worth more than US $ 100 million, would route their investments in PE through the company. Each family was investing at least US $ 10 million. They would stay invested for a long time – at least five to seven years – for making reasonable gains.

As regards prospect of investments in Indian companies by the PE funds he said that the chances were bleak. However, Indian investors could pick up stake in US companies due to decline in their valuations.

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