Download - PREQIN SPECIAL REPORT: PRIVATE EQUITY IN EMERGING … · 2018-05-30 · 4 Preqin Ltd. 2018 PREQIN SPECIAL REPORT: PRIVATE EQUITY IN EMERGING MARKETS 0% 10% 20% 30% 40% 50% 60% 70%

PREQIN SPECIAL REPORT:PRIVATE EQUITY IN EMERGING MARKETSMAY 2018

© Preqin Ltd. 2018 / www.preqin.com2

PREQIN SPECIAL REPORT: PRIVATE EQUITY IN EMERGING MARKETS

FOREWORD 2017 was a landmark year for the global private equity industry. Record fundraising, the closure of the largest fund ever raised, record-high entry prices for assets and dry powder levels exceeding $1tn for the first time all dominated the headlines. But what of emerging markets?

Macroeconomic factors and geopolitical uncertainty remain key issues within emerging markets. Despite this, 2017 witnessed 388 funds reaching a final close, securing an aggregate $115bn – this is the second highest amount of capital raised in the last decade, falling just short of the record seen in 2014 when 513 funds reached a final close raising $120bn. The wider industry trend of capital consolidation is starkly apparent within emerging markets: 250 fewer funds held a final close in 2017 than in 2016, resulting in the average size of funds increasing from $240mn in 2016 to $388mn in 2017.

Along with this surge in fundraising, AUM of emerging markets-focused funds has increased by 33% between the end of 2016 and September 2017. This is a significant rise and can, in part, be attributed to Preqin’s additional research efforts to strengthen our coverage of the Chinese private equity market, with the opening of our Guangzhou office in October 2017. Another factor driving this surge in AUM is the increase in the number of state-backed China-based funds, which are playing a big role for the private equity market in the region.

Buyout deal activity remained robust in 2017: the number of deals was slightly lower compared to the previous year, but in line with ongoing high entry prices for assets, aggregate deal value was up 17% compared to 2016. The rise of venture capital in Emerging Asia continues, with the region home to 90% of all venture capital transactions in emerging markets in 2017 – aggregate deal value was 26% higher compared to 2016, reaching a record $79bn.

Emerging markets-focused funds have demonstrated the ability to deliver attractive returns. Median net IRRs have remained above 8% for 2006-2015 vintage funds, and top-quartile net IRRs have, with the exception of 2012 and 2013 vintages, remained above 20% for 2011-2015 vintages. Furthermore, in the first three quarters of 2017, aggregate capital distributed back to investors exceeded aggregate capital calls; should this continue, the ramifications for emerging markets will be significant.

This report provides a detailed look at the private equity environment in emerging markets, including fundraising, institutional investors, deals and performance, supplementing the information on Preqin’s online platform. For more information, please visit www.preqin.com or contact [email protected].

p3 Fundraising

p5 Fund Managers

p6 Investors

p8 Performance

p9 Buyout Deals & Exits

p10 Venture Capital Deals & Exits

p11 Africa

p12 Central & Eastern Europe

p13 Emerging Asia

p14 Latin America

p15 Middle East

All rights reserved. The entire contents of Preqin Special Report: Private Equity in Emerging Markets, May 2018 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Special Report: Private Equity in Emerging Markets, May 2018 is for information purposes only and does not constitute and should not be construed as a solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent financial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Special Report: Private Equity in Emerging Markets, May 2018. While reasonable efforts have been made to obtain information from sources that are believed to be accurate, and to confirm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Special Report: Private Equity in Emerging Markets, May 2018 are accurate, reliable, up-to-date or complete. Although every reasonable effort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Special Report: Private Equity in Emerging Markets, May 2018 or for any expense or other loss alleged to have arisen in any way with a reader’s use of this publication.

DEFINITIONS

‘Private equity’ includes buyout, venture capital, growth, turnaround, balanced, co-investment, co-investment multi-manager, direct secondaries, PE secondaries and PE fund of funds. It excludes private debt, real estate, infrastructure and natural resources.

‘Emerging markets’ includes all countries in Africa, Asia (excluding Hong Kong, Japan and Singapore), Central & Eastern Europe, Latin America (South and Central America and the Caribbean) and the Middle East (excluding Israel). For a full list of countries included in this report please contact [email protected].

3

DOWNLOAD DATA PACK: www.preqin.com/PEEM18

FUNDRAISING

Since 2014, when emerging markets-focused private equity fundraising

reached a record-high $120bn in capital raised, annual fundraising has exceeded $100bn in both 2016 ($105bn) and 2017 ($115bn), as seen in Fig. 1, with 2015 falling just short ($90bn).

The fundraising landscape has also witnessed an increase in the number of state-backed funds, most notably in China. In 2017, 13 China-based funds with state involvement reached a final close, raising an aggregate $42bn.

Capital consolidation has been seen across the whole private equity industry with emerging markets being no exception. While the level of capital raised has remained high over the past four years, the number of funds closed has decreased significantly, illustrating the success of fewer but much larger funds – nearly three in four funds closed in 2017 met or exceeded their target. The success fund managers are having in achieving fundraising targets stems from investor liquidity, largely due to the higher amount of capital distributed compared to capital

called up by emerging markets-focused funds (see page 8).

In terms of the global private equity fundraising landscape, emerging markets-focused funds dominated in the years immediately following the Global Financial Crisis (GFC) as investors looked for more diversification within their private equity portfolios. Since 2014, however, emerging markets have accounted for a steadily declining proportion of the number of funds and capital secured globally as investors have shifted their focus onto the

31%

38%

48%

55%

46%

40% 39%

48%

41%

32%

19%19%15%

33%

40%

30%

22%

31%

25% 24% 23%

8%

0%

10%

20%

30%

40%

50%

60%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

No. of Funds Closed Aggregate Capital Raised

Source: Preqin

Prop

ortio

n of

Tot

al

Year of Final Close

Fig. 2: Emerging Markets-Focused Fundraising as a Proportion of All Private Equity Fundraising, 2008 - 2018 YTD (As at April 2018)*

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

Africa Central & Eastern EuropeEmerging Asia Latin AmericaMiddle East Diversified Emerging Markets

Source: Preqin

Aggr

egat

e Ca

pita

l Rai

sed

($bn

)

Year of Final Close

Fig. 3: Aggregate Capital Raised by Emerging Markets-Focused Private Equity Funds by Geographic Focus, 2008 - 2018 (As at April 2018)*

329298

439

575

490 464513

707639

388

497631 58

91 72 69120 90 105 115

80

100

200

300

400

500

600

700

800

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

No. of Funds Closed Aggregate Capital Raised ($bn)

Source: Preqin

Year of Final Close

Fig. 1: Annual Emerging Markets-Focused Private Equity Fundraising, 2008 - 2018 YTD (As at April 2018)*

410

230

2,405174

1,508310

234 6921 6

313 47

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No. of Funds Closed Aggregate Capital Raised($bn)

Other

Secondaries

Fund of Funds

Growth

Venture Capital

Buyout

Source: Preqin

Prop

ortio

n of

Tot

al

Fig. 4: Emerging Markets-Focused Private Equity Fundraising by Fund Type, 2008 - 2018 YTD (As at April 2018)*



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No. of FundsRaising

Aggregate CapitalTargeted

DiversifiedEmerging Markets

Middle East

Latin America

Emerging Asia

Central & EasternEurope

Africa

Source: Preqin

Prop

ortio

n of

Tot

al

Fig. 6: Emerging Markets-Focused Private Equity Funds in Market by Geographic Focus (As at April 2018)*

0%10%20%30%40%50%60%70%80%90%

100%

EmergingMarketsFocused

DevelopedMarketsFocused

EmergingMarketsFocused

DevelopedMarketsFocused

No. of FundsRaising

Aggregate CapitalTargeted

Other Private Equity

Secondaries

Fund of Funds

Growth

Venture Capital

Buyout

Source: Preqin

Prop

ortio

n of

Tot

al

Fig. 7: Emerging Markets- vs. Developed Markets-Focused Private Equity Funds in Market by Type (As at April 2018)*

lower-risk developed markets which have also seen strong returns (Fig. 2).

REGIONS TARGETED As seen in Fig. 3, Emerging Asia has long dominated in terms of private equity capital targeting emerging markets: since 2008, eight of every 10 dollars raised for investment in emerging markets has been focused on Emerging Asia. The proportion of total emerging markets capital earmarked for Emerging Asia increased from 74% in 2009-2013 to 86% in 2014-2018 to date – 91% of all capital secured for investment in emerging markets in 2018 so far will target Emerging Asia.

Much of the growth seen in the annual level of aggregate capital raised by emerging markets-focused private equity funds has therefore been driven by funds targeting Emerging Asia, with these vehicles securing over $100bn in 2014 ($103bn) and 2017 ($102bn).

Away from Asia, funds targeting investment in Latin America have raised an aggregate $47bn since 2008 – the second highest total among the emerging regions. However, more recently the region’s share of annual emerging markets-focused fundraising has been decreasing, falling from 11% in 2011 to 2-3% since 2015.

FIRMS TARGETING EMERGING MARKETS Historically, the vast majority of emerging markets-focused private equity vehicles have been raised by managers based in these markets, with international managers

responsible for roughly one-fifth of emerging markets-focused funds closed since 2008 (Fig. 5). However, developed markets-based managers have accounted for 37% of funds closed so far in 2018, the highest proportion on record. Despite this increase, only one of the 10 largest funds closed in 2018 so far is managed by a firm headquartered outside the emerging markets: California-based B Capital Fund, reached a final close on $360mn in February 2018, exceeding its $250mn target size to focus on early growth-stage venture capital investments in B2B technology companies in Asia and North America.

OUTLOOKThere are 970 emerging markets-focused private equity funds on the road as at

April 2018, seeking an aggregate $338bn in capital commitments. The universe of emerging markets-focused funds currently in market shares a similar make-up with that of the longer-term trend: Emerging Asia represents the vast majority of funds in market, with 668 funds targeting $288bn for investment in the region (Fig. 6). Although venture capital dominates the number (462) of funds on the road, growth strategies represent the greatest share (49%) of capital targeted by emerging markets-focused funds on the road (Fig. 7). By comparison, buyout vehicles account for the largest proportion (39%) of aggregate capital targeted in developed markets.

74% 76% 82% 86% 83% 76% 80% 85% 84% 79%63%

26% 24% 18% 14% 17% 24% 20% 15% 16% 21%37%

0%10%20%30%40%50%60%70%80%90%

100%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

Developed Markets-Based Fund ManagersEmerging Markets-Based Fund Managers

Source: Preqin

Prop

ortio

n of

Fun

ds C

lose

d

Year of Final Close

Fig. 5: Emerging Markets-Focused Private Equity Funds Closed by Firm Location, 2008 - 2018 YTD (As at April 2018)*

*Due to Preqin’s additional research efforts to strengthen our alternative assets data in China, fundraising figures have increased significantly as we aim to be more reflective of the industry.

5


FUND MANAGERS

50%42%

30%34%

9% 13%

6% 7%6% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Emerging Markets-Based Fund Managers

Developed Markets-Based Fund Managers

9 Funds or MoreRaised Previously

6-8 Funds RaisedPreviously



First-Time FundManager

Source: Preqin

Prop

ortio

n of

Fun

d M

anag

ers

Firm Headquarters

Fig. 9: Private Equity Fund Manager Experience by Firm Headquarters

Fig. 11: Largest Emerging Markets-Based Fund Managers by Aggregate Capital Raised for Private Equity Funds in the Last 10 Years*

Firm HeadquartersTotal Capital

Raised in Last 10 Years ($bn)*

SINO-IC Capital China 22.6

China Reform Fund Management Beijing, China 20.2

CCT Fund Management Beijing, China 19.6

China Aerospace Investment Holdings Beijing, China 17.4

Russian Direct Investment Fund Moscow, Russia 14.8

Source: Preqin

Fig. 12: Most Consistent Performing Emerging Markets-Based Private Equity Fund Managers

Firm Headquarters Average Quartile Rank

Trustbridge Partners Shanghai, China 1.00

Softbank China Venture Capital Shanghai, China 1.67

DGF Investimentos São Paulo, Brazil 1.75

Enfoca Inversiones Lima, Peru 1.80

CDH Investments Beijing, China 1.92

Source: Preqin

Fig. 8: Number of Emerging Markets-Based Private Equity Fund Managers by Sub-Region

Source: Preqin

*Includes capital raised by funds that have held at least one interim close.

Sub-Saharan Africa257

North Africa73

CentralAmerica

89 SouthAmerica

269

Caribbean24

GreaterChina2,084

Far East320

South Asia392

Central & Eastern Europe

413

Central Asia13

Middle East202

3% 5% 2% 4% 7% 7% 6%

52% 51%48%

82% 80%

58%79%

45% 44% 50%

15% 13%

35%15%

0%10%20%30%40%50%60%70%80%90%

100%

Nor

thAm

eric

a

Euro

pe

Asia

Aust

rala

sia

Latin

Amer

ica

Mid

dle

East

Afri

ca

Increased

No Change

Decreased

Source: Preqin Fund Manager Survey, November 2017

Prop

ortio

n of

Res

pond

ents

Investor Location

Fig. 10: Fund Manager Views on How Institutional Investor Appetite for Private Equity Has Changed over the Past 12 Months by Investor Location



INVESTORS Fig. 13: Number of Emerging Markets-Based Investors in Private Equity by Sub-Region

Source: Preqin

Sub-Saharan Africa81

North Africa25

CentralAmerica

31 SouthAmerica

140

Caribbean13

GreaterChina357

Far East177

South Asia98


62

Central Asia8

Middle East142

Preqin’s online platform contains detailed information on the

investment preferences and past investments of 1,134 emerging markets-based investors that are actively investing in private equity, which collectively allocate $262bn to the asset class.

INVESTOR UNIVERSESixteen percent of all private equity investors are based in emerging markets. Greater China is home to the largest number (357) of participants within emerging markets, representing 31% of institutions actively investing in the asset class (Fig. 13).

Foundations and endowment plans as well as public and private sector pension funds are more prevalent in developed markets, while corporate investors, banks and investment companies comprise the largest proportion of emerging markets-based investors in private equity (Fig. 14).

INVESTMENT PREFERENCESA larger proportion of institutions in developed markets have a preference for buyout funds compared to their emerging

markets-based counterparts, whereas the reverse is true for investments in venture capital and growth vehicles (Fig. 15). A significantly greater proportion of investors in developed markets utilize funds of funds, perhaps a reflection of the competition for top-tier funds within developed markets and funds of funds being the only route to access these vehicles. Furthermore, fund of funds managers typically offer co-investment and secondary opportunities that can provide higher returns and a more bespoke portfolio.

FUTURE ACTIVITYPreqin interviewed over 250 private equity investors at the end of 2017 to gauge their views on the market and their planned future activity in the asset class. Although the North American and European markets are the main focus for investors, 30% of respondents intend to increase their allocation to emerging markets over 2018, with a further 64% planning to maintain their allocation (Fig. 16).

Within emerging markets, Emerging Asia remains at the forefront of investors’ minds. Over half (51%) of respondents specifically favour China, a 12-percentage-point increase from December 2016 and a suggestion that investors expect to see further growth in the Chinese economy over 2018 (Fig. 17). Sixteen percent of investors believe Central & Eastern Europe presents the best investment opportunities, which may be a reflection of LPs searching for value outside developed markets. By contrast, India was viewed less favourably among investors than in December 2015. The low proportions for Russia and the Middle East may be attributed to ongoing geopolitical risk.

PROPORTION OF INVESTORS THAT FEEL EMERGING MARKETS PRESENT THE BEST

OPPORTUNITIES GLOBALLY

Dec-16 Dec-17

18% 18%

7


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

EmergingMarkets-

Based Investors

DevelopedMarkets-

Based Investors

Other

Endowment Plan

Foundation

Sovereign Wealth Fund

Public Pension Fund

Wealth Manager

Asset Manager

Private Sector Pension Fund

Family Office

Insurance Company

Government Agency

Investment Company

Bank/Investment Bank

Corporate Investor

Source: Preqin

Prop

ortio

n of

Inve

stor

s

Fig. 14: Private Equity Investors by Type

7%

41%

16%

67%

11%5%

70%

4%9%

59%

44% 42%

27%

12%

64%

10%

0%10%20%30%40%50%60%70%80%

Bala

nced

Buyo

ut

Fund

of F

unds

Gro

wth

Seco

ndar

ies

Turn

arou

nd

Vent

ure

Capi

tal

Oth

erPr

ivat

e Eq

uity

Emerging Markets-Based Investors Developed Markets-Based Investors

Source: Preqin

Strategy Preference

Fig. 15: Strategy Preferences of Investors in Private Equity

6% 7% 6% 6%

58% 60% 61% 64%

36% 33% 32% 30%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NorthAmerica

Europe Asia EmergingMarkets

IncreaseAllocation

MaintainAllocation

DecreaseAllocation

Source: Preqin Investor Interviews, December 2017

Prop

ortio

n of

Res

pond

ents

Investment Location

Fig. 16: Investors’ Intentions for Their Private Equity Allocations over the Next 12 Months by Investment Location

0% 20% 40% 60%

Africa

Middle East

Russia


Brazil

India

Latin America

China

Emerging Asia

Dec-15 Dec-16 Dec-17

Source: Preqin Investor Interviews, December 2017

Proportion of Respondents

Fig. 17: Countries and Regions within Emerging Markets that Investors View as Presenting the Best Opportunities, 2015 - 2017

Prop

ortio

n of

Inve

stor

s

Fig. 18: Largest Emerging Markets-Based Investors by Current Allocation to Private Equity

Rank Investor Allocation to PE ($bn) Type Location

1 Kuwait Investment Authority 52.4 Sovereign Wealth Fund Safat, Kuwait

2 China Investment Corporation 22.1 Sovereign Wealth Fund Beijing, China

3 National Pension Service 21.4 Public Pension Fund Jeonju-si, South Korea

4 China Life Insurance 9.9 Insurance Company Beijing, China

5 Export-Import Bank of China 6.6 Bank Beijing, China

Source: Preqin

Fig. 19: Sample Emerging Markets-Based Investors Targeting Private Equity Funds in the Next 12 Months

Investor Location Type Investment Plans for the Next 12 Months

Chang'An International Trust Shaanxi, China Wealth Manager

Plans to commit CNY 1-1.5bn to private equity funds in the next 12 months. The wealth manager is open to all fund types, but maintains a preference for growth and fund of funds vehicles with a global reach, and will invest with a mixture of existing managers in its portfolio and managers it has not previously worked with.

Al Muhaidib & Sons Group Damman, Saudi Arabia

Investment Company

Expects to invest in 4-5 private equity funds in the next 12 months. The Saudi Arabia-based investment company will target buyout and growth vehicles focused on North America and the Middle East, but will consider opportunities in West Europe on a case-by-case basis, investing only with managers it has not previously worked with.

Korea Post Insurance Sejong-si, South Korea

Insurance Company

Will commit KRW 54-108bn ($50-100mn) to up to two private equity funds in the next 12 months. The South Korea-based insurance company will target mid-cap buyout vehicles focused on North America and Europe.

Source: Preqin



PERFORMANCE

43 75 77 103 153 180 226 279 309 358427

520

5588 103 104

107131

134169 147

153

173

275

0

100

200

300

400

500

600

700

800

900

Dec

-06

Dec

-07

Dec

-08

Dec

-09

Dec

-10

Dec

-11

Dec

-12

Dec

-13

Dec

-14

Dec

-15

Dec

-16

Sep-

17Dry Powder($bn)

UnrealizedValue ($bn)

Source: Preqin

Asse

ts u

nder

Man

agem

ent (

$bn)

Fig. 20: Emerging Markets-Focused Private Equity Assets under Management, 2006 - 2017*

-60-40-20

020406080

100120140

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Q1-

Q3

2017

Capital Called up ($bn) Capital Distributed ($bn) Net Cash Flow ($bn)

Source: Preqin

Fig. 21: Capital Called up and Distributed by Emerging Markets-Focused Private Equity Funds, 2006 - Q3 2017

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Top Quartile NetIRR Boundary

Median Net IRR

Bottom QuartileNet IRR Boundary

Source: Preqin

Net

IRR

sinc

e In

cept

ion

Fig. 22: Emerging Markets-Focused Private Equity Funds: Median Net IRRs and Quartile Boundaries by Vintage Year

Vintage Year

0%

5%

10%

15%

20%

25%

30%

9% 10% 11% 12% 13%

EmergingMarkets Focused

North AmericaFocused

Europe Focused

Source: Preqin

Fig. 23: Private Equity Risk/Return: Emerging Markets- vs. North America- and Europe-Focused Funds (Vintage 2005 onwards)

Return - Median Net IRR

Risk

- St

anda

rd D

evia

tion

of N

et IR

R

Fig. 24: Emerging Markets-Focused Private Equity Funds to Watch (Vintage 2016-2018)

Fund Firm Vintage Fund Size (mn) Type

Emerging Market(s) Targeted

Net Multiple (X)

Date Reported

Bain Capital Asia III Bain Capital 2016 3,000 USD Buyout ASEAN 1.63 Sep-17

East Ventures 5 East Ventures 2016 28 USD Early Stage: Seed Southeast Asia 1.27 Mar-17

CRCM Frontier Technology Fund CRCM Ventures 2016 60 USD** Early Stage China 1.26 Mar-18

AB Value Bridge VI AB Value Capital Partners 2016 100 USD Direct Secondaries Greater China 1.24 Dec-17

PAG Asia Capital Fund II PAG Asia Capital 2016 3,656 USD Buyout Emerging Asia 1.23 Dec-17

Source: Preqin

*Due to Preqin’s additional research efforts to strengthen our alternative assets data in China, AUM figures have increased significantly as we aim to be more reflective of the industry. In Fig. 20, state-backed China-based funds represent $74bn in AUM as at September 2017.**Denotes target size.

9


BUYOUT DEALS & EXITS

+17%Growth in the aggregate value of private equity-backed buyout deals in emerging markets from 2016 to 2017.

$214mnAverage value of private equity-backed buyout deals in emerging markets in 2017, 48% higher than 2016 ($145mn).

201Number of private equity-backed buyout exits in emerging markets in 2017, the lowest number since 2009.

541

399

569

712649

578 557

466 489445

105

0

10

20

30

40

50

60

0

100

200

300

400

500

600

700

800

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

No. of Deals Aggregate Deal Value ($bn)

Source: Preqin

No.

of D

eals

Fig. 25: Private Equity-Backed Buyout Deals in Emerging Markets, 2008 - 2018 YTD (As at April 2018)

Aggregate Deal Value ($bn)

0%10%20%30%40%50%60%70%80%90%

100%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

Africa Central & Eastern EuropeEmerging Asia Latin AmericaMiddle East (Excl. Israel)

Source: Preqin

Prop

ortio

n of

Dea

ls

Fig. 26: Private Equity-Backed Buyout Deals in Emerging Markets by Sub-Region, 2008 - 2018 YTD (As at April 2018)

0

10

20

30

40

50

60

70

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

Sale to GP RestructuringIPO & Follow-on Trade SaleAggregate Exit Value ($bn)

Source: Preqin

No.

of E

xits

Fig. 27: Private Equity-Backed Buyout Exits in Emerging Markets by Type, 2008 - 2018 YTD (As at April 2018)

Fig. 28: Largest Private Equity-Backed Buyout Deals in Emerging Markets, 2016 - 2018 YTD (As at April 2018)

Portfolio Company Investment Type Deal Date Deal Size (mn) Deal Status Investor(s) Location Primary

Industry

Belle International Holdings Limited Public-to-Private Apr-17 53,100 HKD Completed CDH Investments, Hillhouse

Capital Management China Retail

Allegro Group Sp. z oo Buyout Oct-16 3,253 USD Completed Cinven, Mid Europa Partners, Permira Poland Internet

McDonald's Outlets in China and Hong Kong Buyout Jan-17 2,100 USD Completed Carlyle Group, CITIC Capital, CITIC

Group China Restaurants

Woori Bank Co., Ltd Public-to-Private Nov-16 2,400,000 KRW Announced

Eugene Asset Management, Hanwha Life Insurance, IMM

Private Equity, Kiwoom Securities, Korea Investment & Securities,

Mirae Asset Global Investments, Tong Yang Life Insurance

South Korea

Financial Services

Primewaterview Limited Buyout Sep-17 2,000 USD Announced Milost Global, Inc Nigeria Property

Source: Preqin

Aggregate Exit Value ($bn)



VENTURE CAPITAL DEALS & EXITS

+26%Growth in the aggregate value of venture capital deals in emerging markets from 2016 to 2017.

90%of venture capital deals in emerging markets in 2017 were located in Emerging Asia.

220Number of venture capital-backed exits in emerging markets in 2017, down from 252 in 2016.

699 651995

1,438 1,5011,762

2,606

4,397

5,305

4,274

1,805

0

10

20

30

40

50

60

70

80

90

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

No.

of D

eals

Fig. 29: Venture Capital Deals* in Emerging Markets, 2008 - 2018 YTD (As at April 2018)


0%10%20%30%40%50%60%70%80%90%

100%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

Africa Central & Eastern EuropeEmerging Asia Latin AmericaMiddle East

Source: Preqin

Prop

ortio

n of

Dea

ls

Fig. 30: Venture Capital Deals* in Emerging Markets by Sub-Region, 2008 - 2018 YTD (As at April 2018)

Fig. 32: Largest Venture Capital Deals* in Emerging Markets, 2016 - 2018 YTD (As at April 2018)

Portfolio Company Deal Date Stage Deal Size (mn) Investor(s) Location Primary Industry

Didi Chuxing Apr-17 Unspecified Round 5,500 USDBank of Communications, China

Merchants Bank, Pagoda Investment, RCFSI, Silver Lake, SoftBank

China Telecoms

Ant Financial Services Group Apr-16 Series B/Round 2 4,500 USD

CCB Trust Co., Ltd., China Development Bank Capital, China Investment

Corporation, China Life Insurance Company, China Post Capital, Primavera

Capital

China Internet

Didi Chuxing Dec-17 Unspecified Round 4,000 USD Mubadala Capital, SoftBank China Telecoms

Source: Preqin

0

5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

Africa Central & Eastern EuropeEmerging Asia Latin AmericaMiddle East Aggregate Exit Value ($bn)

Source: Preqin

No.

of E

xits

Fig. 31: Venture Capital Exits in Emerging Markets by Sub-Region, 2008 - 2018 YTD (As at April 2018)

Aggregate Exit Value ($bn)

*Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.

11


AFRICA

Fig. 37: Largest Private Equity-Backed Buyout Deals in Africa, 2016 - 2018 YTD (As at April 2018)

Portfolio Company Deal Date Deal Size (mn) Location

Primewaterview Limited Sep-17 2,000 USD Nigeria

Tenke Fungurume Mining S.A.R.L. Nov-16 1,136 USD

Democratic Republic of

Congo

Royal Dutch Shell's onshore assets in Gabon Mar-17 628 USD Gabon

Consol Glass (Pty) Ltd. Mar-17 6,600 ZAR South Africa

Tsebo Sep-16 5,250 ZAR South Africa

Source: Preqin

21

11

1719 18

28

16 15

19

10

21.2 1.5 1.9 2.10.8

3.01.6

4.52.2

0.7 0.10

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 33: Annual Africa-Focused Private Equity Fundraising, 2008 - 2018 YTD (As at April 2018)

Year of Final Close

36%45%

30%27%

11%7%

16% 13%

3% 3%3% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Africa-BasedInvestors

Developed Markets-BasedInvestors

$100bn or More

$50-99.9bn

$10-49.9bn

$5-9.9bn

$1-4.9bn

Less than $1bn

Source: Preqin

Fig. 34: Assets under Management of Private Equity Investors (As at April 2018)

Prop

ortio

n of

Inve

stor

s

79

58

46

6169 73

94

82

109

98

25

0

1

2

3

4

5

6

0

20

40

60

80

100

120

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

No.

of D

eals

Fig. 35: Private Equity-Backed Buyout Deals in Africa, 2008 - 2018 YTD (As at April 2018)

Aggregate Deal Value ($bn) 14

1922

29

4946

41

6865

69

35

0

100

200

300

400

500

600

0

10

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

No. of Deals Aggregate Deal Value ($mn)

Source: Preqin

Fig. 36: Venture Capital Deals* in Africa, 2008 - 2018 YTD (As at April 2018)

No.

of D

eals

Aggregate Deal Value ($m

n)

Fig. 38: Largest Venture Capital Deals* in Africa, 2016 - 2018 YTD (As at April 2018)


Africa Internet Group** Apr-16 375 EUR Nigeria

Takealot Online (Pty) Ltd. Apr-17 960 ZAR South Africa

Off-Grid Electric Tanzania Limited Jan-18 55 USD Tanzania

Travelstart Online Travel Operations Pty LTD. Feb-16 40 USD South Africa

iRoko Partners Limited Jan-16 19 USD Nigeria

Source: Preqin

*Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.**€375mn financing round includes a €75mn round announced in February 2016, a €225mn round announced in March 2016 and a €75mn round announced in April 2016.



CENTRAL & EASTERN EUROPE

Fig. 43: Largest Private Equity-Backed Buyout Deals in Central & Eastern Europe, 2016 - 2018 YTD (As at April 2018)


Allegro Group Sp. z oo Oct-16 3,253 USD Poland

Zabka Polska sp. z o.o. Feb-17 1,100 EUR Poland

PJSC Polyus May-17 700 USD Russia

Profi Rom Food Group Nov-16 533 EUR Romania

Russian Helicopters, JSC Feb-17 300 USD Russia

Source: Preqin

31

21 20

32

28

33

26

2119

22

1

5.73.3

1.7 2.85.5

15.3

4.82.3

12.1

5.3

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 39: Annual Central & Eastern Europe-Focused Private Equity Fundraising, 2008 - 2018 YTD (As at April 2018)

Year of Final Close

49% 45%

25% 27%

8% 7%

11% 13%

6% 3%2% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Central & EasternEurope-Based

Investors

Developed Markets-Based Investors

$100bn or More

$50-99.9bn

$10-49.9bn

$5-9.9bn

$1-4.9bn

Less than $1bn

Source: Preqin


Prop

ortio

n of

Inve

stor

s

122

62

111

129

10093

77 73

86

105

12

0

1

2

3

4

5

6

7

8

9

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

No.

of D

eals

Fig. 41: Private Equity-Backed Buyout Deals in Central & Eastern Europe, 2008 - 2018 YTD (As at April 2018)


52 55

108

142

185206

188

156177

145

42

0

100

200

300

400

500

600

700

0

50

100

150

200

250

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 42: Venture Capital Deals* in Central & Eastern Europe, 2008 - 2018 YTD (As at April 2018)

No.

of D

eals


n)

Fig. 44: Largest Venture Capital Deals* in Central & Eastern Europe, 2016 - 2018 YTD (As at April 2018)


Digital Finance International Dec-17 50 USD Russia

AImotive Jan-18 38 USD Hungary

Capital Com SV Investments Limited Jul-17 25 USD Cyprus

Creamfinance LLC Mar-17 21 EUR Poland

Organica Water Inc. Feb-18 21 USD Hungary

Source: Preqin


13


EMERGING ASIA

Fig. 49: Largest Private Equity-Backed Buyout Deals in Emerging Asia, 2016 - 2018 YTD (As at April 2018)


Belle International Holdings Limited Apr-17 53,100 HKD China

McDonald's Outlets in China and Hong Kong Jan-17 2,100 USD China

Woori Bank Co., Ltd Nov-16 2,400,000 KRW South Korea

Axis Bank Limited Nov-17 116,260 INR India

HDFC Jan-18 111,040 INR India

Source: Preqin

228 234

359

468

388357

416

617560

316

385123 44 74 53 44

103 80 84 101

7.60

100

200

300

400

500

600

700

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 45: Annual Emerging Asia-Focused Private Equity Fundraising, 2008 - 2018 YTD (As at April 2018)*

Year of Final Close

27%

45%

26%

27%8%

7%22%

13%8%3%9% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Emerging Asia-BasedInvestors

Developed Markets-BasedInvestors

$100bn or More

$50-99.9bn

$10-49.9bn

$5-9.9bn

$1-4.9bn

Less than $1bn

Source: Preqin


Prop

ortio

n of

Inve

stor

s

225207

315

404365

327290

226204

150

49

0

5

10

15

20

25

30

35

40

45

0

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

No.

of D

eals

Fig. 47: Private Equity-Backed Buyout Deals in Emerging Asia, 2008 - 2018 YTD (As at April 2018)


596 528811

1,163 1,1111,317

2,194

3,983

4,863

3,837

1,648

0

10

20

30

40

50

60

70

80

90

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 48: Venture Capital Deals** in Emerging Asia, 2008 - 2018 YTD (As at April 2018)

No.

of D

eals


Fig. 50: Largest Venture Capital Deals* in Emerging Asia, 2016 - 2018 YTD (As at April 2018)


Didi Chuxing Apr-17 5,500 USD China

Ant Financial Services Group Apr-16 4,500 USD China

Didi Chuxing Dec-17 4,000 USD China

Meituan-Dianping Sep-17 4,000 USD China

Meituan-Dianping Jan-16 3,300 USD China

Source: Preqin

*Due to Preqin’s additional research efforts to strengthen our alternative assets data in China, fundraising figures have increased significantly as we aim to be more reflective of the industry.**Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.



LATIN AMERICA

Fig. 55: Largest Private Equity-Backed Buyout Deals in Latin America, 2016 - 2018 YTD (As at April 2018)


InterGen's Mexico Assets Dec-17 1,256 USD Mexico

Odebrecht Ambiental S.A. Aug-16 908 USD Brazil

Petrobras Chile Distribuición Ltda May-16 470 USD Chile

Petrolera Entre Lomas S.A. Jan-18 360 USD Argentina

Avant Energy S. de R.L. de C.V. Dec-16 300 USD Mexico

Source: Preqin

25

14

27

36

3229

32 32

19 18

1

5.3

1.1

6.810.5

3.6 3.4

7.8

2.9 3.0 2.60.2

0

5

10

15

20

25

30

35

40

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 51: Annual Latin America-Focused Private Equity Fundraising, 2008 - 2018 YTD (As at April 2018)

Year of Final Close

44% 45%

23% 27%

13% 7%

16% 13%

1%3%

2% 4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Latin America-BasedInvestors


$100bn or More

$50-99.9bn

$10-49.9bn

$5-9.9bn

$1-4.9bn

Less than $1bn

Source: Preqin


Prop

ortio

n of

Inve

stor

s

86

56

77

9690

6570 71

7886

18

0

1

2

3

4

5

6

7

8

9

0

20

40

60

80

100

120

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

No.

of D

eals

Fig. 53: Private Equity-Backed Buyout Deals in Latin America, 2008 - 2018 YTD (As at April 2018)

Aggregate Deal Value ($bn) 28

38 42

87

120

163156 155

168177

62

0

100

200

300

400

500

600

700

800

900

1,000

0

20

40

60

80

100

120

140

160

180

200

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 54: Venture Capital Deals* in Latin America, 2008 - 2018 YTD (As at April 2018)

No.

of D

eals


n)

Fig. 56: Largest Venture Capital Deals* in Latin America, 2016 - 2018 YTD (As at April 2018)


99Taxis Jan-18 300 USD Brazil

Nubank Brasil Mar-18 150 USD Brazil

Rappi, Inc. Jan-18 129 USD Colombia

99Taxis Jan-17 100 USD Brazil

99Taxis May-17 100 USD Brazil

Source: Preqin


15


MIDDLE EAST

Fig. 61: Largest Private Equity-Backed Buyout Deals in the Middle East, 2016 - 2018 YTD (As at April 2018)


Al Borg Medical Laboratories Jun-16 270 USD Saudi Arabia

Middlesex University Dubai Jan-17 75 USD United Arab Emirates

Diamond Meat Processing LLC Apr-16 17 USD United Arab

Emirates

AMI Middle East LLC Aug-17 7 USD United Arab Emirates

Source: Preqin

13

8

6

109

7

5

98

6

3.0

1.40.8 1.0

2.9

0.21.3

0.3 0.6 0.10

2

4

6

8

10

12

14

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 57: Annual Middle East-Focused Private Equity Fundraising, 2008 - 2018 YTD (As at April 2018)

Year of Final Close

26%

45%

26%

27%7%

7%26%

13%4%3%11%4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Middle East-Based Investors


$100bn or More

$50-99.9bn

$10-49.9bn

$5-9.9bn

$1-4.9bn

Less than $1bn

Source: Preqin


Prop

ortio

n of

Inve

stor

s

911 12

17

36

3027

3531

45

18

0

100

200

300

400

500

600

700

800

0

5

10

15

20

25

30

35

40

45

50

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

Fig. 60: Venture Capital Deals** in the Middle East, 2008 - 2018 YTD (As at April 2018)

No.

of D

eals


n)

Fig. 62: Largest Venture Capital Deals** in the Middle East, 2016 - 2018 YTD (As at April 2018)


Careem Inc. Dec-16 350 USD United Arab Emirates

Souq.com FZ-LLC Feb-16 275 USD United Arab Emirates

Careem Inc. Jun-17 150 USD United Arab Emirates

Wadi.com Feb-16 67 USD United Arab Emirates

MSPharma May-17 45 USD Jordan

Source: Preqin

*Deal size not disclosed.**Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.

29

16

2022

25

20

26

1412

6

10

200

400

600

800

1,000

1,200

1,400

1,600

1,800

0

5

10

15

20

25

30

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD


Source: Preqin

No.

of D

eals

Fig. 59: Private Equity-Backed Buyout Deals in the Middle East, 2008 - 2018 YTD (As at April 2018)


n)

*

New York ■ London ■ Singapore ■ San Francisco ■ Hong Kong ■ Manila ■ Guangzhou

[email protected]

PREQIN SPECIAL REPORT:PRIVATE EQUITY IN EMERGING MARKETS

MAY 2018

PREQIN

More than 60,000 alternative assets professionals rely on our global data, tools, insights and intelligence to achieve their objectives:

■ Investors: asset allocation, manager selection and portfolio management ■ Fund managers: fundraising, portfolio monitoring and investor relations ■ Service providers and advisors: business development and in-depth market knowledge ■ The wider alternative assets industry: insight, understanding and information

Download - PREQIN SPECIAL REPORT: PRIVATE EQUITY IN EMERGING … · 2018-05-30 · 4 Preqin Ltd. 2018 PREQIN SPECIAL REPORT: PRIVATE EQUITY IN EMERGING MARKETS 0% 10% 20% 30% 40% 50% 60% 70%

Top Related