(Reuters) – Emerging market private equity hit a capital raising record in 2008 of $66.5 billion but now faces a more tenuous market because of the global economic slowdown, an industry survey said on Monday.
The amount raised last year up 12 percent over the $59.1 billion raised in 2007, according to the Emerging Market Private Equity Association (EMPEA).
“The good news is that there is a pool of capital that can take advantage of unprecedented investment opportunities in emerging economies,” Sarah Alexander, president of Washington, D.C.-based EMPEA, said in a statement.
“The bad news is that fund-raising in 2009 will be much more challenging. Western institutional investors are grappling with their own asset allocation issues, and the globalization of the financial crisis will impact expansion plans into new markets,” she said.
EMPEA started collecting the data as early as 2004 with the first full-year results published in 2006, a spokeswoman said.
The figures for 2008 represent data from 210 private equity funds focused on emerging markets. The group estimates 371 private equity funds are looking to raise as much as $144 billion in capital.
EMPEA’s survey showed 52 percent of institutional investors believe their emerging market private equity fund portfolio will be “less negatively affected by the financial crisis than their developed market counterparts.”
In the regional breakdown, emerging Asia raised 60 percent of the total, or about $39.6 billion.
A multi-region category was second with 12 percent, or $7.72 billion, raised while central and eastern Europe/Russia and the Commonwealth of Independent States region was third, taking in 8 percent of the total, or $5.55 billion. These two categories swapped places in the rankings versus 2007.
(Reporting by Daniel Bases; Editing by Leslie Adler)