EMPEA Brief: European Bank Deleveraging: Opportunities and Challenges for EM PE Investors
European bank deleveraging is a key macro variable affecting the emerging markets private equity asset class. European banks face daunting challenges both in meeting enhanced capital adequacy requirements, and in restructuring themselves to increase their profitability and stabilize their sources of funding. The European bank retreat from the emerging markets will lead to contractions in cross-border lending, reductions in support to their subsidiaries and decreasing participation in trade finance. Yet this process will create a number of opportunities for emerging market private equity investors.
Our latest EMPEA Brief provides the first assessment of European bank deleveraging on the EM PE asset class, and includes:
- An assessment of the drivers and scale of the deleveraging process over the short, medium and long term;
- Quantification of how European bank deleveraging has impacted all emerging market regions; and
- Opportunities for private equity investors across equity and credit strategies.