So, what's changed?

“It was the best of times, it was the worst of times,” is the first line of Charles Dickens's novel A Tale of Two Cities. Dickens was referring to the French Revolution, an episode that may outrank recent economic developments in terms of its historic import (surely?) but which nonetheless has resonance. For private equity firms operating in emerging markets, for example, these are indeed the best and worst of times.

On page 51, you will find the starting point of our extensive emerging markets coverage in this issue. As the introduction suggests, global economic conditions are being felt with force in the world's developing markets. That much is clear. What is less obvious is whether particular outcomes should be welcomed or feared. For example, when a stock market plummets, is this bad news because a prized exit option is gone – or good news because private equity is now the only source of growth capital in town? Discuss.

Such dichotomies are not unique to emerging markets, however. In his In Europe column, Philip Borel points out that the controversial marking-to-market accounting method may end up having a positive effect on limited partners' private equity portfolios that – arguably – few could have predicted. Turn to page 22 to find out more.

These are times of uncertainty, because of the huge dislocation the world has suffered. We are, after all, somewhere between the old global financial system falling apart and a new one being constructed. Getting one's bearings is difficult in such a climate. But, for those adept at spotting the new opportunities that such tectonic shifts can generate, there is much to look forward to in the period ahead.

At the recent PEI/EMPEA Emerging Markets Forum in London, one speaker signalled that, over the coming period of strife for the West, emerging markets funds have the opportunity to out-perform significantly and to demonstrate that henceforth they should be seen as a vital element of any private equity portfolio.

That's the kind of fighting spirit needed. However, fund performance in emerging markets and elsewhere may in reality serve only to further underline a rather prosaic truth – simply, that some will succeed where others fail. The same Dickens quote continues: “It was the age of wisdom, it was the age of foolishness…we were all going direct to heaven, we were all going direct the other way.” Some things never change.

Enjoy the issue