Chart of the Week: BRIC focused funds

 LPs are retreating from BRIC focused funds - but by how much?   




Fundraising for Brazil, Russia, India and China (BRIC) focused private equity funds fell to a six year low, measured by both capital raised and number of funds closed, in 2013.


Four times as much capital was raised in 2011 than in 2009:  $57.32 billion was collected from 161 funds in 2011 as investors sought opportunities in emerging markets as developed economies faltered.  Taoshi Energy Equity Investment Fund I was the largest fund to close that year receiving $3.27 billion in capital commitments.  


In 2012 there was a 62 percent decrease in the capital raised by funds focusing on the BRIC countries. FIP Sondas, a Brazilian focused energy fund, secured the most capital in the year but it only collected 65 percent of its $4.1 billion target. LPs in the fund include Banco Santander, Petros (Petroleo Brasileiro S.A.) and Previ.


In 2013, only 42 BRIC focused funds held final closes, securing $9.65 billion. The $2 billion Russian Development Investment Fund Mubadala Co-investment Fund was the largest fund to close last year. However, much of this capital was committed by the Russian state, rather than by global institutional investors. LPs are reverting back to developed markets, particularly in the US, due to economic improvements in these regions and overcrowding of investments in emerging markets.