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Private equity investors favor China, Brazil

  Private equity investors expect to invest more money in emerging markets in the next five years with China and Brazil topping the list of favored destinations, according to an industry survey released on Monday.

Of 156 institutional investors polled, 78% plan to commit additional funds to emerging market private equity managers in the next five years, said the survey by the Emerging Markets Private Equity Association and UK-based Coller Capital. Forty-nine percent of the respondents said they would raise their commitments within the next two years.

“In the face of a global economic downturn, there has been no sign of private equity investors in emerging markets running for the hills,” said Erwin Roex, a partner at Coller, which specializes in buying private equity stakes from players making early exits.

“This increased investor confidence stems not only from the prospect of stronger growth in emerging economies, but also from the increasing maturity of the sector,” Roex said in a statement.

For the second year in a row, investors in the survey ranked China as the most attractive destination for private equity in the next 12 months. Brazil jumped to second from number four.

India was ranked third in the latest survey, down one notch from 2008, while Russia and countries that made up the former Soviet Union came in last at number nine. (Reuters)