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Thu, 17-Dec-2009 Industries exposed to private equity activity are growing faster than the ones that are not, a study by the World Economic Forum (WEF) showed. The study showed production, value added and employment were all higher in industries where deals happened in the period between 1991 and 2007. “If structured appropriately, private equity is indeed a vital catalyst to sustained economic growth on a global basis,” Joncarlo Mark, portfolio manager at Calpers — the biggest U.S. public pension fund — said in a press release.” The study is the third in a series of reports by the World Economic Forum to look at alternative investments, The Global Economic Impact of Private Equity Report 2010, examined the impact of private equity investments across 20 industries in 26 western countries over the period 1991-2007.
“The study… included data over other cycles which makes me comfortable that we’ve identified a general trend although clearly the current downturn is different in scale to other cycles,” said Josh Lerner, who contributed to the study.
According to the report, the number of employees in industries with greater private equity activity, grew at an annual rate that is between 0.4 percent and 1 percent higher than other in industries. And while average output growth was 6.2 percent in industries exposed to private equity over the period, it stood at 5.7 percent in those that were not. Moreover, private equity backing did not cause an industry to be more volatile than others.
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Fri, 24-Jul-2009 Mr & Mrs Asia – Asia’s Middle Class Revealed report by CLSA Asia-Pacific Markets dated Autumn 2007 provides a good background of the Asian consumer, demographic and lifestyle trends and prospective investment opportunities. Asia’s middle class will be a core element in leading the Asian region as the primary global growth engine in the future. It is paramount to understand these Asian consumers to identify investment trends and opportunities, especially for private equity given its longer-term investment horizon.
This 256-page report is one of the most comprehensive surveys of Asia’s middle class ever undertaken, covering 35,200 households across the region that included 11 countries – China, Hong Kong, Taiwan, Japan, Korea, Thailand, Malaysia, Singapore, Indonesia, Philippines and India. See a copy of the report below and/or directly download it here.
Key Areas Covered in Mr & Mrs Asia – Asia’s Middle Class Revealed Read More »
Tue, 21-Jul-2009 Coller Capital, one of the largest secondary private equity investors in the world, publishes the Global Private Equity Barometer which is a snapshot of worldwide trends in private equity from the opinions of approximately 120 private equity investors or limited partners (LPs) worldwide. See a copy below and/or directly download it here.
Key Highlights from Global Private Equity Barometer Summer 2009
- One third of LPs plan fewer private equity firm or general partner (GP) relationships. Almost a third (31%) of private equity investors intend to reduce their number of private equity firm or general partner (GP) relationships over the next two years. GPs in Asia-Pacific will, overall, fare better in this respect than their counterparts in more developed private equity markets. Fewer investors (just 11%) are planning to reduce their number of GP relationships in the Asia-Pacific region than in other regions.
- A quarter of GPs expected to fail in the fallout from the downturn. LPs believe 28% of venture capital firms and 23% of buyout firms will not be able to raise a new fund in the next 7 years – in other words, they will go out of business. Read More »
Tue, 14-Jul-2009 Chinese Consumer Report 2009 by Roland Berger Strategy Consultants is an overview of the Chinese consumer and their preferences from a survey of over 12,000 individual interviews were conducted with consumers between the age of 18 and 64 in a study (see below a copy of the report or directly download it here). Some of the highlights include: Read More »
Thu, 9-Jul-2009 The World Economic Forum recently published a comprehensive report — The Global Enabling Trade Report 2009 — that assesses the extent to which countries around the globe have in place the institutions and policies for enabling trade (see a copy of the report below or directly download a copy here). It also serves as a yardstick of the extent to which countries enjoy the factors facilitating the free flow of goods and identifying areas of the Enabling Trade Index (ETI) where improvements are most needed. The ETI mirrors the main enablers of trade, breaking them into four overall issue areas, called subindexes: Read More »
Mon, 13-Apr-2009 The Emerging Markets Private Equity Survey 2009 published by Emerging Markets Private Equity Association (EMPEA) and Coller Capital was released on April 6, 2009. The survey covered 156 respondents that represented a range of institutions and geographies, including pensions, foundations, endowments, asset managers and funds‐of‐funds from North America, Europe, Asia, Africa, the Middle East and Latin America. According to the survey, emerging markets means emerging economies of Africa, Asia, Central & Eastern Europe, Russia/CIS, Latin America and the Middle East. See a copy of the report below or directly download it here.
Key Highlights:
- Limited partners’ appetite for emerging markets private equity
- 78% of limited partners currently invested in emerging markets private equity plan to commit to additional emerging markets managers and/or geographies over the next 5 years, with 49% planning to do so over the next 2 years.
- 62% of limited partners with current exposure to emerging markets private equity expect the dollar value of their new commitments to remain steady or rise in 2009 relative to their actual commitments in 2008. Read More »
Thu, 12-Mar-2009 China continues to be the world’s most robust emerging market for private equity and venture capital finance, even in a difficult global economic environment, according to a report release on March 5, 2009 titled “Private Equity and Strategic M&A Transactions in China 2009″ released by China First Capital, Ltd., a boutique investment bank with offices in China, Hong Kong and the USA. “While the overall investment environment remains challenging and the effects of 2008′s turbulence are still being felt, 2009 will be a year of unique opportunity for private equity, venture capital and mergers and acquisitions in China,” said Peter Fuhrman, China First Capital’s Chairman and the report’s author.
“In 2009, China should rightly be among the most attractive — and active — private equity investment markets in the world,” the China First Capital report predicts. “Many of the international private equity firms we work with are expecting to invest more in Chinese SMEs in 2009 than in 2008. Chinese companies raising capital this year will enjoy significant financial advantages over competitors, improving market share and profitability.”
Read More »
Wed, 7-Jan-2009 A publication by The Boston Consulting Group (BCG) and IESE Business School of the University of Navarra dated December 2008 titled ‘Get Ready for the Private-Equity Shakeout – Will This Be the Next Shock to the Global Economy?‘ covers the following 4 questions:
- What is the root of the problem?
- How will the shakeout affect different players within the private-equity industry?
- What impact will the collapse of private-equity portfolio companies have on the wider economy?
- What can private-equity firms do now to deal with the threat of a shakeout or to capitalize on any opportunities?
Key Points
- Most private equity firms’ portfolio companies are expected to default on their debts which are estimated at $1 trillion
- Roughly 60% of 328 private equity portfolio companies surveyed were trading at distressed levels (i.e., any debt with a credit spread in excess of 1,000 basis points and is likely to default or breach its loan covenants).
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