Industry Newsroom

Emerging Market Private Equity Deals at Record $49B in 2017 – EMPEA Data

LONDON, Feb 21, 2018 (Reuters) – A record $49 billion was invested in emerging market private equity deals in 2017, data from industry body EMPEA showed on Wednesday, with Asian private capital fundraising at its highest since 2008.

With investors keen to put money to work in fast-growing emerging markets, deal activity rebounded from $34 billion in 2016 and outstripped the previous high of $40 billion in 2014, but EMPEA noted that not all regions recovered at the same pace.

Capital invested in emerging Asia increased by 57 percent year-on-year, and by 120 percent in Central and Eastern Europe and the CIS, but activity in other regions was more subdued.

“Time (is) likely still needed for improving economic conditions to translate into a faster pace of capital deployment,” EMPEA said.

Consumer services attracted the most investment in 2017, with $17.9 billion – nearly triple the 2008 total. The two largest deals were a $2.2 billion buy-out of Chinese shoe retailer Belle International and a $2 billion acquisition of Polish auction website Allegro.

On the fundraising side, emerging Asia led the pack with $61 billion raised. Of this, $9 billion went into just one fund – KKR Asian Fund III, setting a record for the region.

Its success underscored the greater opportunities and appetite for deals in Asia Pacific, where private equity firms are increasingly setting their sights on buying control of companies.

Private credit funds raised a record $7.3 billion, and infrastructure funds attracted $8.1 billion, with just under 49 percent of these monies specifically targeting renewable power.

Public market exits for private capital-backed emerging market companies rose to 181, from 140 in 2016, as fund managers took advantage of attractive market conditions to list.

EMPEA said Latin America stood out amid 2017’s public market exits revival, with 11 initial public offerings. (Reporting by Claire Milhench, Editing by William Maclean)