Emerging markets share of PE fundraising reaches record high - EMPEA
Emerging markets-focused private equity funds received their largest ever share of global commitments to the asset class last year, according to the Emerging Markets Private Equity Association (EMPEA).
The 20% share compares to 12% in 2007 and 5% in 2003. In total, 161 emerging market funds raised $40.3 billion in 2012, up slightly from the 148 funds that raised $38.5 billion in 2011.
EMPEA noted that an increase in capital commitments flowing to pan-emerging markets and Asia-focused regional funds helped to offset reduced interest in China- and India-dedicated vehicles, which saw capital raised drop by 35% and 24%, respectively.
On the investment front, GPs committed $23.7 billion in disclosed value to emerging market companies through 819 deals compared with $26.9 billion through 876 deals the year prior.
"With macroeconomic turbulence in Europe and political uncertainty in the US dominating the news in 2012, emerging markets proved to be a resilient and reliable engine of continued growth, thus driving increased interest in the emerging markets private equity asset class," said Jennifer Choi, Acting CEO of EMPEA in a statement.
"However, the pace of investment activity has slowed as businesses adjust to relative slowdowns in emerging market growth, as well as uncertain legal and regulatory regimes and challenging exit environments that continue to characterize a number of these markets."
According to AVCJ Research, while emerging economies may be getting a larger share of PE capital globally, 2012 was still a tough year for Asia. Fundraising slumped by more than one third to $46.8 billion in 2012 from $72.9 billion a year ago. The lowest annual total since 2009.
China funds attracted $23.4 billion in commitments in 2012, down 51.3% year-on-year, and just $6.7 billion in the final six months. Renminbi fundraising came to $19.9 billion, while US-dollar vehicles received $3.5 billion, a year-on-year fall of 35.7% and 79.6%, respectively.
Investment in the Asia Pacific region reached $57.2 billion in 2012, also the lowest level since 2009, with just over 1,600 deals completed compared to more than 2,000 the previous year.
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