The Fundraising Review is EMPEA’s annual overview of trends in fundraising among private equity funds dedicated to investments in the emerging markets of Asia, Central & Eastern Europe/Russia, Latin America, the Middle East and Africa.

Emerging Markets PE Fundraising & Investment Review 2010

2009 will be remembered as one of the most challenging years on record for the private equity industry. Fundraising plummeted globally-the decline in new emerging market fund commitments was on par with the decrease in developed markets in percentage terms. 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.

Raising capital from Western institutions will continue to prove challenging until institutional investors see liquidity from the large buyout commitments that represent the bulk of their PE exposure. That said, the first quarter of 2010 has yielded some encouraging signs that investors are returning to the market. Provided that cash flow pressures continue to ease, valuations continue a reasonable trajectory and exit markets resume, EMPEA expects more vigorous levels of activity in emerging markets in 2010.

Investment activity in 2009 was comparatively robust relative to developed markets. Emerging markets captured 26% of global private equity investment, a significant increase from a 7% share in 2004. Overall transaction volumes in emerging markets were only slightly depressed, with 674 deals totaling US$22.1 billion in 2009, a 54% fall in value but only an 11% drop by number of transactions.

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