New Delhi: Private equity investments jumped to USD 5.8 billion in the first six months of 2011, driven by higher number of large-size transactions as well as increased activities in the infrastructure space, says E&Y.

With capital markets remaining sluggish, more and more investors seem to prefer the PE route to raise funds.

According to global consultancy Ernst & Young, PE deal value in the six months ended June climbed 34 per cent to USD 5.8 billion as compared to same period a year ago.

"The increase in aggregate deal value was largely driven by greater number of large deals (deals over USD 100 million).

"Top 10 deals in H1 '11 aggregated USD 2.7 billion compared to USD 1.75 billion in H2 '10 and USD 2 billion in H1 '10," E&Y Partner (Private Equity) Mayank Rastogi told a news agency.

The first six months of this year saw 211 PE deals, much higher than 154 transactions witnessed in first half of 2010.

Infrastructure attracted highest PE investments in 2011 first half, accounting for over USD 1.35 billion of the total deal value.

"This trend of infrastructure sector attracting the most PE investments has continued from H1 '10 and H2 '10, where it recorded 27 per cent (USD 1.16 billion) and 36 per cent (USD 1.36 billion) of aggregate PE investments, respectively," Rastogi said.

In terms of deal count, retail and consumer products was on top with 29 transactions in the first six months of 2011, followed by infrastructure (28) and technology (23).

Among the top 10 PE investments in first half of 2011 are GIC and Bain Capital pumping in USD 850 million into Hero Investment Private Ltd.

Other major transactions include Apollo Management LP investing USD 350 million in Welspun Corp and Apax Partners infusing USD 330 million in iGate Patni.

As per E&Y, India-focused PE funds mopped up as much as USD 2.8 billion in the first half of 2011.

On the other hand, exit activities of PE players remained sluggish during this period due to weak capital market conditions.

"The volatile capital markets have been a significant factor for such decline in exit activity during H1 '11," E&Y noted.

Rastogi had earlier said that sluggish stock markets have in a way helped the PE investment activity as "a number of companies which had filed for IPOs or were looking to raise money on public markets are now actively looking to raise money from PE".

(Agencies)