Emerging markets private equity fundraising boom hits $35bn

Emerging markets private equity fundraising is on track to significantly beat 2007 totals.

More than 100 funds dedicated to private equity investment in emerging markets have raised $35 billion in capital in the first half of 2008, a 68 percent increase over the amount raised during the same period in 2007, according to the latest numbers.

Data from the Emerging Markets Private Equity Association (EMPEA) showed the total value of private equity funds raised in the first two quarters of 2008 was greater than the $33 billion raised during all of 2006.

Sarah
Alexander

Sarah Alexander, president of EMPEA, said:  “What began as incipient interest in emerging markets private equity has developed into an acceptance of the asset class as part of mainstream allocation strategy. Economic conditions in the US and Europe appear to be having less impact on fundraising for private equity in emerging markets compared to mature private equity markets.”

According to EMPEA’s analysis 104 funds raised a total of $35 billion in capital commitments. Average fund sizes increased 72 percent, from $197 million in the first half of 2007 to $339 million during the first half of 2008.

The association said the dramatic growth during first half of 2008 was driven by a surge in funds raised for investment in emerging Asia. They accounted for 75 percent of capital raised in the first half of 2008, compared with 55 percent during the same period in 2007.

Funds focused on emerging Asian private equity markets raised a total of $26.3 billion, more than double the $11.6 billion raised by emerging Asian funds in the first half of 2007. Pan-Asian regional funds accounted for $11 billion of the $26.3 billion total raised for emerging Asia, while fundraising among China-dedicated funds boomed, with a watershed $11.2 billion raised to the end of June.

Capital commitments for India-dedicated funds grew by 357 percent over the same period in 2007, raising a total of $3 billion in the first half of the year.