Emerging from turmoil

Institutional investors are increasing their commitment to private equity funds in emerging markets such as the Middle East despite the developed market turmoil, according to a survey by the Emerging Markets Private Equity Association.

“The private equity markets in developing countries are maturing, and the turmoil in the developed markets should have limited impact," said Sarah Alexander, association president. "Most private equity deals in emerging markets are growth capital investments that use little, if any, leverage.”

The association estimates that emerging market funds have raised $25 billion between January and April 2008, and $59 billion in 2007, which was a two-fold increase over 2006. The association has more than 200 members in over 40 countries with in excess of $400 billion in assets under management.

Asia dominates the investment strategies of association members surveyed followed by Central and Eastern Europe with Latin America, Africa and the Middle East attracting growing interest. Of those surveyed, 35% said they would be investing in the Middle East by 2013, three times the 11% active in the region now.