Emerging markets throughout the world offer tremendous growth prospects generally, and specifically a real private equity opportunity. This opportunity is driven by a number of factors, including: increasing wealth levels and a growing middle class leading to consumer driven growth, enormous demand for infrastructure, and resource and commodity supply.
Speaking at the Emerging Markets Private Equity Forum, Graham Thomas, head of Standard Bank private equity, said: “We are focusing on sectors that benefit from the current macro climate in our target markets and in particular from increasing consumer demand driven by economic growth and an increase in overall wealth levels and consumable income.”
He continued: “We believe it is critical to retain discipline during this time of market volatility and our focus is on investments of US$10-50m for significant stakes in good solid businesses. Although there may be some retreat from emerging markets generally in the short term, which will have an impact on private equity funding I think this will be a good thing long term. There are obvious knock-on effects from current global economic conditions, but in the long term the dynamics and fundamentals of the markets remain strong and represent a secular trend.”
He added that the industry was in danger of getting a little over-heated and a period of tougher funding will make sure it continues the disciplined development path it needs to deliver value in the long term. “Emerging markets private equity has a terrific future and will be a long-term wealth generator for investors and for the countries themselves,” he concluded.
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