Emerging market private equity assets reach record high

Total assets held by private equity fund managers based in emerging markets reached a record high of almost $300 billion (€270 billion) in September last year following a period of sharp growth in asset values, latest figures show.

Research from Preqin showed that funds under management held by locally based managers increased by $39 billion in the nine months after the end of 2014 – a dramatic growth spurt as the increase had been just $10 billion in the previous 12 months.

Growth was based mostly on an increase in asset values.

The asset growth has come at a time of increasing interest in emerging market private equity investment from fund managers outside these regions.

In 2011, about a quarter of the $69 billion in assets raised was attributed to managers from outside of emerging markets; for 2016 year-to-date, two-thirds of assets raised was from this same set of managers.

“Recent years have seen increased participation from international general partners, which are attracted by the robust underlying demographics and potential for strong returns,” said Christopher Elvin, head of private equity at Preqin.

Asia dominated the emerging market private equity landscape in Preqin’s research. The region accounted for 77% of fundraising and was home to 51% of emerging market-based managers and half of emerging market investors.

Venture capital was the most sought after strategy for emerging market investors, with 55% stating a preference for this fund type. Only 35% sought buy-out funds, which were far more popular in North America and Europe.

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