The Case for Emerging Market Private Equity V9
IFC has a long-standing commitment to developing the private equity asset class in Emerging Markets.
We are now approaching ten years of experience with a Dedicated approach to investing in Funds and we think other investors may benefit from sharing this experience.
Based on our experience and analysis of data from over 90 funds holding over 800 companies, we make the following observations:
- 1) The returns on Emerging Market Private Equity are driven by Growth and Efficiency rather than leverage or multiple expansion.
- 2) Economic forecasts suggest that the Emerging Markets will continue to grow for the foreseeable future, supporting growth-based private equity.
- 3) Significant growth-oriented private equity opportunities are available beyond the small number of countries in which most Emerging Market Private Equity investment is currently concentrated.
- 4) Many of the Risks of Emerging Market Private Equity are over-stated and we provide data which places these risks in perspective.