Click here for printer friendly page

Private equity in emerging markets: rethinking the approach

The mid to late-1990s witnessed a growing consensus in emerging markets that the private sector was to be the primary catalyst for growth and development. For this sector to succeed, however, the demand for investment capital had to be met – private equity was a logical choice. Roger Leeds and Julie Sunderland of SAIS explore the growth of private equity in emerging markets and its failure to meet expectations.

Private equity investors were attracted to emerging markets by the severe capital shortages, which implied low valuations for the companies seeking funds. In addition, many investors at this time had large pools of capital to invest in private companies. As a result, many investors were willing to take a higher risk by investing in emerging markets. But, growth has now slowed to a trickle and many industry players now predict a reversal of fortunes. 

Copyright © 2003 Journal of Applied Corporate Finance

Click here to view full report (pdf 42kb)

You need Adobe Acrobat to read this document. If you do not have it, you can download it free from www.adobe.com/products/acrobat/readstep.html

With kind permission of the Journal of Applied Corporate Finance