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Private equity and venture capital funds’ investments declined by 40% to $8.8 billion in the September quarter, a report said.

The decline in overall investments happened despite the number of deals being 26% higher during the same period at 283 transactions, the report by industry lobby grouping IVCA and consultancy firm EY said.

“Geopolitical tensions have created uncertainty, dampening investment sentiment as investors become more cautious, leading to slowing deal-making. This sluggishness may persist if global uncertainties continue,” the consultancy firm’s partner Vivek Soni said.

However, the firm’s outlook remains “cautiously optimistic” as India’s fiscal health remains strong, he added.

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Large deals of over $100 million more than halved to 21 with a cumulative value of $5.5 billion, the report said, adding pure-play PE/VC deals, excluding real estate and infrastructure, were 30% lower at $6.5 billion.

The largest deal during the quarter in the pure play PE/VC investments was the acquisition of GeBBS Healthcare Solutions by EQT from ChrysCapital for $860 million, the consultancy firm said.

The quarter recorded exits of $8.2 billion, which was 8% lower than the value recorded in the year-ago period, while by volume, the same was 19% lower at 71 transactions.

PE and VC funds raised $1.7 billion in new funds for future investments during the quarter, which was 37% lower than the year-ago period, it said, specifying the largest fundraise was the $500 million raised by 360 ONE WAM for its secondary fund.