Emerging market private equity rebounds-EMPEA

Mon Feb 14, 2011 5:01am GMT
 

 * Emerging market private equity volumes rise in 2010
 * PE investment up 30 pct to $28.8 bln last year
 * Emerging Asia top investment destination: $18.3 bln
 * Latin America investment up 405 pct to $6.6 bln
 By Daniel Bases
 NEW YORK, Feb 14 (Reuters) - Private equity investment in
emerging markets rose 30 percent in 2010 to $28.8 billion,
driven by an increase in deal volume and a slight increase in
transaction size, according to a survey released on Monday .
 The Emerging Markets Private Equity Association reported
that fund-raising held steady, increasing slightly to $23.5
billion from $22.6 billion in 2009.
 There were 856 private equity and venture capital deals
closed last year versus 674 in 2009, EMPEA's statement said.
 For the first time since 2006, the amount of cash invested
by private equity funds was higher than the amount they raised
"suggesting that an improving investment environment is finally
absorbing accumulating dry powder and that global pools of
capital are zeroing in on the opportunities in emerging
markets," EMPEA said.
 For a related graphic, click r.reuters.com/jag97r
 Emerging markets' share of global private equity
fund-raising reached 11 percent, matching 2008 levels, as funds
raised globally dropped to their lowest point since 2004.
 "The recovery in the pace of investments is quicker in the
emerging markets than anywhere else. We are still seeing pretty
depressed fund-raising and investment activity globally. That
is why I think the $28.8 billion is significant," Jennifer
Choi, director of research at EMPEA told Reuters.
 "The sub-bullet point is Latin America being a big reason
for that. Obviously Asia is holding its own but Latin America
certainly is capturing greater and greater interest from
investors," she said.
 According to Choi, in 2010 there were two record-breaking
funds raised specifically for Latin America. Boston-based
Advent International raised $1.65 billion while Southern Cross
Group raised $1.68 billion, Choi said.
 Last year, investment activity in Latin America surged 405
percent to $6.6 billion, due in large measure to investments
from global pools of capital. Fund-raising for the region hit a
record $5.6 billion.
 While Latin America surged, emerging Asia remains the most
favored region, closing deals worth $18.3 billion, or 64
percent of total capital invested in 2010. See table below.
 "On the deal side, investments focused on growth and
expansion capital will continue to dominate the landscape, and
Brazil in particular is living up to last year's expectations
as a compelling investment story," EMPEA's Chief Executive
Officer Sarah Alexander said in the statement.
 In comparison, deal volumes still remain below the $53
billion invested in 2007 and $48 billion in 2008.
 EMPEA has 290 members with more than $900 billion in assets
under management.
 Below is a breakdown of regional deal volumes for 2009 and
2010:
                          2009                 2010*
                    Number    Total      Number    Total
                    Of        Capital    Of        Capital
(in $USD millions)     Deals     Invested   Deals     Invested
==============================================================
Emerging Asia           473       13,867     576       18,308
CEE & CIS                76        3,323     117        2,398
LatAm & Caribbean        54        1,318      92        6,648
MENA                     34        2,215      23          793
Sub-Saharan Africa       37        1,383      48          631
==============================================================
Emerging Markets Total  674       22,104     856       28,778
BRICs Breakdown                                             
==============================================================
Brazil                   20          989      53        4,604
China                   233        6,288     276        9,190
India                   176        4,011     251        6,222
Russia                   20          217      45        1,516
Source: EMPEA
* Data as of Dec. 31, 2010


 
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