Charles “Chip” Kaye, co-president of Warburg Pincus, said emerging markets are at a “tipping point” in the global private equity landscape, as the role of emerging markets increases in importance.
Kaye is a veteran of the private equity emerging markets arena, having set up Warburg Pincus' Hong Kong office in 1994 and led its push into Asia. He became co-partner of the global private equity firm in 2002.
A number of factors, such as a greater domestic consumption and higher levels of savings, mean that emerging markets are showing “increasing macro-economic stability” and “increasing independence”, Kaye said during a speech at The Emerging Markets Private Equity Forum in London.
Warburg Pincus in March, for example, had a potentially lucrative exit blocked when China's commerce ministry rejected Coca Cola's $2.9 billion bid for Hui Yuan Juice. Warburg owns just under 7 percent of the Chinese beverage company.
India meanwhile, Kaye considered “marginally riskier” but said it remains an attractive place to invest. He added that it is less connected to the global economy and “capable of managing its way through the economic crisis”.
On a following panel discussion, Richard Laing, the chief executive of CDC Group, said he believed India offers the best investment opportunities today. CDC Group is mandated by the UK government to invest primarily in Africa-focused funds, but, said Laing, if he could chose to invest in another market alongside those where CDC already is, it would be India. “The return from India in the long term will be very exciting,” he said.