Private Equity in Emerging Markets

Recent years have seen significant volatility in developed capital markets together with a roller coaster ride of returns.In contrast, investors in emerging markets have experienced lower volatility with more consistent financial performance.Likewise, private equity, while not immune to market forces,has delivered more stability and been less correlated to major public markets. By bringing these factors together — emerging markets and private equity — investors have been able to generate both stronger growth and lower volatility. Yet a new breed of private equity investor is adding a third element that not only boosts financial performance, but also delivers social/environmental impact. These investors are discovering that by building upon the decades-long experience of development finance institutions (many of which have used public funding to finance enterprise creation in emerging markets) they can deliver capital while pursuing sustainable, long term returns for investor and other stakeholders alike