Private Equity in Emerging Economies: Which Markets are Sufficiently Mature? Should Investors Wait or Invest Immediately?

Alexander Groh ()
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Alexander Groh: EM - EMLyon Business School

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Abstract: This chapter proposes a composite measure that determines the attractiveness of 125 countries to receive capital allocations from investors in the private equity (PE) asset class. There is a major shift in the PE landscape from "traditional" and mature markets towards emerging regions. Emerging countries attract investors by high economic growth opportunities. Numerous research contributions discuss the criteria and they can be grouped into six key drivers of international PE activity: economic activity, depth of capital market, taxation, investor protection and corporate governance, human and social environment, and entrepreneurial culture and deal opportunities. Legal structures and the protection of property rights strongly influence the attractiveness of PE markets. limited partners therefore have to evaluate the investment environment and need to overcome potential knowledge deficits with respect to new markets. They gather data and meet local general partners to analyze the determinants they deem important before allocating to a particular country.

Date: 2018-09-10
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Published in The Routledge Companion to Management Buyouts, Routledge, 2018, 978-1-138-71384-0

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02311105

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