VIDEO: Ralph Jaeger of Siguler Guff

"There are interesting areas especially with small managers," he explains. "If you look at deals at tier two or tier three cities, there are attractive valuations with very high growth rates. This is not just with China or Asia, but also applies to other areas such as Latin America as well as Central and Eastern Europe."

The information asymmetry that exists among smaller companies is expected to deliver a host of high-performing buyout deals across the small-cap space.

Recent examples include EPAM Systems, the largest IT outsourcing software engineering service provider in Eastern Europe. Sigular Guff invested in the company in 2006 and it went public in New York last year.

"We generated over 10x return and we continue to see these high growth companies in Russia, specifically in the types of investment we try to access," he says. "We look at consumer, healthcare, business services and also financial services."

While direct and co-investments remain important for Siguler Guff, fund-of-funds represent around 30-40% of its overall business. Of that, 15-20% is allocated to Asia.

"Private equity has been doing very well and is proven to have outperformed significantly when compared to public equities, depending on which sectors and markets," Jaeger adds. "Going forward, we think this trend will continue with better resilience in downside scenarios."

 

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