EM PE Quarterly Review – Volume VI, Issue 2

In this issue


What Really Lies Ahead for Emerging Markets Private Equity

News and Data

New Member Spotlight

Funds Launched & Closed

EM PE Performance

Notable EM PE Exits & IPOs

Upcoming Events


Greece’s troubles and worries about the rest of Europe, juxtaposed against surging EM public markets, have thrown into question conventional ideas both about risk and emerging markets, leading to talk of a “new world order” in which emerging markets lead the global economy.

This may be true from a global macro-perspective, but from a private equity perspective, the realities suggest that the EM PE industry is not out of the woods yet. 2010 is certainly shaping up to be better than 2009. But talk of a complete rebound is premature. When almost 800 people gathered last month in Washington, DC for the 12th annual Global Private Equity Conference co-hosted by the IFC and EMPEA, the talk, summed up here, suggested that raising capital, closing deals and delivering returns all remain quite challenging. While the mood is bullish, the deals and the cash remain somewhat elusive.

But the longer-term outlook is positive. A slowly thawing fundraising environment was central to a luncheon discussion of the results of this year’s Emerging Markets Private Equity Survey, jointly conducted by EMPEA and Coller Capital. As we discuss in this Quarterly Review, investors share a bright outlook for their EM PE investments, with most planning to continue building their programs based on robust outperformance expectations. The question remains one of time and scale.

More worryingly, summarized in our regulatory update in this issue, a number of significant changes are afoot in the European Union and the United States that will likely translate to more complex, costlier operating structures for fund managers globally and that may even cut off access for EM managers to pools of capital in Europe. Worse, emerging market regulators themselves might take these developments as clues to how their own PE industries should be regulated. This chain reaction could significantly stymie the nascent growth capital investment industry that is so critical for the long-term development of emerging economies.