Private Equity opportunities in Developing Countries and Emerging Markets - August 2007

The Private Equity industry is booming around the world, and hardly a month goes by without another record breaking deal being announced. The upheavals in the credit markets in July August 2007 obviously mean that credit conditions are toughening. The arguments presented still very much apply despite the very public problems the Private Equity industry is facing, because the opportunities to make money in emerging markets are so good, and ultimately making money is what the Private Equity industry is all about. This article highlights some of the most attractive areas for Private Equity professionals to focus on in rapidly developing economies, based on the author and PMR’s experience advising international companies in the Eastern Europe region and doing deals since the beginnings of the 1990s. As PMR expands into China we observe that the opportunities in other big developing countries are similar if not even larger. Clearly the Eastern European economic situation, with European Union membership of some of the countries in the region, the lower travel and logistic costs, free trade and freedom of labour movement means the region is different from Asia, India and South America. The reader will immediately be able to see when the opportunities identified apply only the European arena.