Private equity investors back emerging markets

An increased appetite for emerging markets – particularly China and India – saw investors pour record sums into private equity funds targeting these regions last year.

Private equity funds targeting emerging markets raised more than $33 billion (€25 billion) in 2006 – 29 percent more than the previous year.

162 funds focused on emerging markets in Asia, Eastern Europe, Latin America, the Middle East and Africa raised $33.2 billion between them last year, according to the latest figures from the Emerging Markets Private Equity Association.

The figures are a further sign of escalating investor appetite for emerging markets. The total represents a 29 percent increase on 2005, when $25.8 billion was raised, and is more than five times the $6.5 billion raised in 2004.

EMPEA president Sarah Alexander said: “As emerging markets private equity becomes a more widely accepted allocation strategy among investors, we should continue to see growth, albeit at a more sustainable pace than the breakneck growth we saw in 2004–2005.”

The main focus of the fundraising in 2006 was Asia, which accounted for more than half of the capital raised. Sub-Saharan Africa and Latin America also saw a substantial increase in investor demand.

See Feature: Bumper year for emerging markets