SEBI ( Securities & Exchange Board of India) proposes to regulate fund pools, such as real estate funds, to reduce fraud and risk to public markets. However, the move may not be received well by the industry which has had a free run for more than a decade.The Indian regulator's move to frame rules for them follows global concerns that the risks posed by private pool of funds may be high since they are highly leveraged. Across the world, banks have been asked to either spin off private funds and real estate funds. The Reserve Bank of India has been against such investments for a long time.
PIPE, or private investment in public equity funds, would be permitted to invest in small-sized listed companies which are not in any of the market indices, effectively ruling out investments in more than 80% of the actively-traded stocks. Those funds may be allowed access to non-public information while carrying out due diligence under a confidentiality agreement with restriction in dealing in securities for a particular time frame.
Alhough still far below the 2007 peak of $17 billion, last year's total deal value more than doubled from that of 2009 to $9.5 billion, including venture capital, infrastructure private equity investments and real estate investments.
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