Preqin: Emerging Market Private Equity Assets Boom to Cross $500 Billion Mark

One-fifth of global investors intend to increase their allocation to private equity in emerging markets in 2017.

Emerging markets-focused private equity funds have seen their assets grow at an average annual rate of 21% over the past decade, from $93 billion in December 2006 to $564 billion in September 2016, according to the latest findings by research firm Preqin.

The results come as venture capital investment in Asia through Q2 2017 accounted for almost half the global total invested and outpaced North America.

 Among emerging markets, the majority of activity is focused on Greater China. The region is home to 883 private equity fund managers and 224 investors in the asset class. Funds focused on Greater China have raised $441 billion since the start of 2008, compared to $45 billion for Latin America-focused funds, the second-highest total.

One-fifth of global investors reported that they intended to increase their allocation to private equity in emerging markets in 2017, while only 5% said they wanted to decrease their exposure.

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Despite the strong fundraising by funds in the region, the profits returned to investors have exceeded drawdowns for investment recently.  Distributions to investors exceeded capital calls by $7 billion in 2015, and $13 billion in Q1-Q3 2016.

“Robust performance and recent net capital flows to investors have proved that emerging markets-focused vehicles can offer real returns on investment,” Christopher Elvin, head of private equity products at Preqin, said in a statement.

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