Intel Capital expects slower exit for its investment in 2012

Intel Capital, the global investment arm of chip giant Intel, is expecting a slower exit pace for its investments in 2012.

According to Sudheer Kumar Kuppam, managing director - India, Japan, ANZ and SE Asia, Intel Capital, there were too many issues hovering around global economic outlook.

Until a solution was found for some of the issues, the year 2012 would probably be a little softer on the exit front, he said.

According to Kuppam, in the emerging markets, a significant trend seen in the past few years has been that most of its exits had been through an initial public offer (IPO). In the developed markets though, merger and acquisitions (M&A) had been the key mode of exit, he added.

He said as far as overall exit pace for 2012 was concerned, it would be slower mainly due to the equity market situation, which would not be very conducive for companies going public.

In such a situation, the only fall-back options that venture capital and private equity (PE) firms had were M&As, followed by secondary transactions (one investor selling to another), which would make for a significant part of exits next year.

According to analysts, it was very unusual that a single mode was used by investors to exit their portfolio companies. Rather it was always a mix of IPOs, M&As and secondary sales, he added.