Data & Intelligence
Governance in Emerging Market Private Capital: A Practical Resource for Investors and Fund Managers
By necessity, this document provides a high-level overview of the key ingredients of good governance. It does not go into great detail on the individual components; rather, it is meant to be a resource to assist practitioners in thinking through this vital topic. As appendices, we have included a master checklist to help you think through key good governance considerations, as well as a repository of resources to which you may refer to get further details on specific topics.
The fundamental takeaway is that the governance of a portfolio company, fund management firm or fund is not one-size-fits-all. Each country is different—with its own regulations and governance standards—each sector is different, and each firm is different. Therefore, good governance requires thoughtful consideration and tailoring of policies, processes, and procedures, and the cultivation of an ethical culture.
Why Good Governance Matters
Good governance is core to private equity’s value proposition in emerging markets—and it always has been. As active investors, PE firms can play a material role in an organization’s
performance, in terms of both supporting sustainable growth through value creation and mitigating risks. Good governance policies are also often required by the regulatory environment(s) in which a PE fund/investor operates— through these vary significantly across EM. This section briefly examines these three themes.
Call to Action
This report was conceived as a practical resource for investors and fund managers in EM PE. While it provides a comprehensive overview of key corporate governance and business integrity considerations across the three layers of the industry—PE fund managers, PE funds, and portfolio companies—it’s important to realize that good governance is not a static state. As numerous interviewees told us throughout the process of researching this report, there is always progression and every organization can pursue continuous improvement. Moreover, regulations are constantly in flux, creating new governance and compliance requirements.
Renuka Ramnath | Founder, Managing Director & Chief Executive Officer, Multiples Alternate Asset Management Private Limited
Brian Lim | Partner and Head of Asia and Emerging Markets, Pantheon Ventures
David Rubenstein | Co-Founder and Co-Executive Chairman, The Carlyle Group
Dr. Andrew Kuper | Founder and CEO, LeapFrog Investments
Torbjorn Caesar | Senior Partner, Actis
Drew Guff | Managing Director & Founding Partner, Siguler Guff & Company