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Alternative Market Briefing

Emerging market-focused private equity funds reach record $297bn

Thursday, June 30, 2016

amb
Christopher Elvin
Benedicte Gravrand, Opalesque London:

The total assets held by private equity managers based in emerging markets (EM) have increased year-on-year to reach almost $300bn as of September 2015, following a slow growth through 2013 and 2014.

This recent growth has been primarily based on an increase in the value of assets from which funds have yet to exit, according to a report by Preqin, an alternative assets industry research house. The level of uncalled capital available for investment peaked at $94bn at the end of 2013, and has since fallen to $89bn, while unrealised value has grown from $154bn to $208bn in the same period.

This increase in EM-based assets comes despite a greater appetite from managers based outside emerging markets: in 2015, EM-based managers accounted for 49% of the $40bn raised, and in 2016 YTD, they accounted for a third of the total capital raised, an all-time low.

"Emerging markets have developed significantly over the past decade; as many more developed markets have seen slower growth in the wake of the global financial crisis, some economies in emerging regions maintained double-digit growth rates," said Christopher Elvin, head of private equity at Preqin.

"Recent years have also seen increased participation in emerging markets from international GPs, which are attracted by the robust underlying demographics and potential for strong returns," he added.

"While managers based in......................

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