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Survey shows measured optimism for investing in emerging market private equity

OPIC provides financing and political risk insurance to emerging market private equity funds, such as the Silverlands Fund, which invests in small farms in Africa.
OPIC provides financing and political risk insurance to emerging market private equity funds, such as the Silverlands Fund, which invests in small farms in Africa.

 

More than two-thirds of global limited partners plan to maintain or increase their commitments to emerging market private equity funds, with Southeast Asia, India and Sub-Saharan Africa generating the most interest, a new survey shows.

The Global Limited Partners Survey from the Emerging Market Private Equity Association (EMPEA) showed that investors who planned to increase investments were motivated not only by expectations for strong returns, but also a growing comfort with the skills and experience of emerging market private equity fund managers. In addition, about 20 percent of those surveyed said they planned to increase the value of their new emerging market private equity commitments because they are seeking greater environmental, social and economic impact through their investing.

Despite these optimistic responses, the survey also revealed some signs of caution. Although the majority of those surveyed indicated that they would maintain or increase commitments, only about 40 percent of those surveyed were anticipating an increase, down from 46 percent last year. Survey respondents cited political risk and currency risk as the main factors deterring investment, although they also indicated that they expected their 2015 emerging market funds to outperform developed market counterparts.

EMPEA surveyed 107 limited partners from 101 different institutions in 32 countries, collectively representing more than $1 trillion in reported global private equity assets. Read more here

 

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