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Private equity deal activity in emerging markets holds steady

6 Feb 2014

africa-tanzania_sqEmerging markets attracted $24bn of private equity capital across 883 deals last year, which represents a decline of seven per cent from 2012, according to a recent study.

Fundraising also declined with 150 funds raising $36bn last year, down 19 per cent from the previous 12 month period, said the Emerging Markets Private Equity Association (EMPEA).

The report noted that the constant deal volume “indicates that private equity investors continue to find investable companies across a diverse array of markets.”

EMPEA president and CEO Robert van Zwieten said, “Fundraising in private equity follows a cyclical pattern and we are still in a downturn phase of the cycle. The investment side is the real story, however, because where others see adversity, private equity investors see opportunity.

“Private equity continues to be the optimum way to tap into emerging market investment opportunities.

“We expect that these markets will adapt, greatly diverse as they are, to the new economic realities of a moderate Chinese economic slow-down and US interest rates rising gradually over time.

“For the time being, with asset re-pricing underway and local currencies depreciating in many emerging markets, this is a favourable time for highly discerning fund managers to put capital to work in select sectors.”

The report also showed that venture capital accounted for 43 per cent of deal activity in emerging markets compared with only 17 per cent in 2009.

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