Reuters – Investors continued to pour money into emerging markets private equity between January and April, raising $25 billion (13 billion pounds) and on course to top last year’s total despite a downturn in developed markets, a report revealed. <\/p>\n
The present level of fundraising suggests a total of $75 billion for 2008. That compares with $59 billion in the whole of 2007, the Washington DC-based Emerging Markets Private Equity Association (EMPEA) said in a report released late on Tuesday.<\/p>\n
Although a sizeable increase, it would be a slowdown from the doubling of funds seen between 2006 and 2007.<\/p>\n
"Recent record-breaking fundraising is further evidence that investors see long-term potential for strong returns in emerging markets," said EMPEA President Sarah Alexander in a statement.<\/p>\n
"(Investors) recognise private equity markets in developing countries are maturing, and the turmoil in developed markets should have limited impact."<\/p>\n
While a reluctance of major banks to lend money has stifled Western buyouts, deals in emerging markets rely on cash or local banks less exposed to the global credit crunch.<\/p>\n
The report said emerging market private equity funds were expected to deliver an average premium of 6.7 percent relative to U.S. counterparts, despite broadly similar management fees — 1.95 percent for emerging funds and 1.8 percent for those focused on North America and Europe.<\/p>\n