Emerging Markets top Private Equity investment in 2010

Interest in investing private equity dollars in Latin America continue to grow. Brazil deals ranked among the top five largest investments this year. PE investment in Brazil increasing 53% in the first six months of 2010 over full year 2009 totals. Much of the $4.5 billion in emerging markets private equity investments in the first half of this year came from an investment surge in Latin America. Data comes from the Emerging Markets Private Equity Association’s latest research.

In the first half of this year, investment totaled US$13 billion versus US$8 billion as of June 2009, an increase of 55%, driven by more deals (up 44%) as well as a surge in Latin American investment and continued strong activity levels in China and India.

At the same time, fundraising levels are also showing signs of rebounding, with US$11 billion raised in the first half of 2010 versus US$9 billion raised in the same period last year. Asia accounts for 55%, with China as the leading destination for new capital. Notable upticks in Latin America  and Africa accounted for a significant portion of the overall increase in capital raised.

And that is likely to continue: A recent private equity investor survey by Coller Capital and the Washington-based EMPEA revealed 37% of respondents expect to increase or add private equity investments in Brazil.

In an interview to Pension & Investments Steven J. Cowan, managing director of consulting at PCGI LLC, a Washington-based private equity emerging markets funds-of-funds manager, said the firm has been quite active in Latin America since its founding in 2005 and has seen a dramatic increase in investor interest in the region this year.

According to this source, private equity investors are investing in emerging markets looking for high growth areas with the potential of higher returns. They began with the largest, China, and then migrated to India and then Latin America.

Published by Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists Group. She has a PhD in Economic History and advises companies and investment agencies in international business development.She served as Corporate Relations Director and later, on the board of the Brazilian Investment Analysts Association (APIMEC).

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