Featured Research
The private equity industry in Central and Eastern Europe (CEE), inclusive
of Southeastern Europe and the Baltics, has faced a number of challenges
over the past year. Institutional investors interested in building an emerging
markets private equity allocation strategy have often first dipped their toes
in the water with funds focused on CEE due to a lower perceived degree of risk
based on the region’s economic ties to Western Europe. Many of these investors
became fearful over the last year of a general economic collapse in the region,
choosing to retreat from the market, or focus on new emerging markets such
as Asia and Latin America. While fundraising for the region grew greater than
ten-fold between 2003 and 2008, rising from US$230 million to US$2.8 billion,
funds dedicated to the region raised merely US$600 million in 2009. Investments
across CEE dropped slightly in 2009 with US$3 billion in capital deployed,
versus US$3.3 billion in 2008 and down from a peak of US$7.1 billion in 2007.
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Featured Industry News
Private equity investment in emerging markets totaled US$22 billion in 2009, reaching a record 26% share of global private equity investment activity. Fundraising for emerging markets private equity totaled US$23 billion in 2009, following global trends back to 2004/2005 levels. Detailed statistics are available to EMPEA members.
A total of 196 private equity (PE) funds focused on emerging markets raised US$22.6 billion in 2009, a 66% decline from the record-breaking US$66.5 billion raised by 210 funds in 2008. The decline in new fund commitments was on par with an estimated 65% decrease in fundraising in developed markets.
Emerging markets captured 26% of global private equity investment, versus only 7% in 2004, with US$22.1 billion invested across 674 deals. Falling transaction sizes contributed to a 54% drop in total investment value, while the number of PE transactions fell by only 11% in 2009. This compares to a 79% decrease in value and 50% fewer deals in developed markets.
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