According to a survey by global PE research firm Preqin, the Asian countries are receiving considerable investor interest, with 45 per cent of respondents saying that this region is attractive at present.
Supported by strong fundraising targeted at the country for the past couple of years, China was voted as an area of interest by just over half of respondents, followed by India for which 41 per cent voted in favour, Preqin said.
“Emerging markets are, at present, attracting a significant degree of attention from investors, with two- thirds of respondents to our survey either currently having exposure to these markets or intending to invest there in the future. 58 per cent told us they invest in emerging markets and an additional 9 per cent will consider,” it said.
“The proportion of investors that are actively seeking to invest in the asset class is gradually increasing, and it is notable that half of investors have set aside more capital for new private equity investments in 2010 than they did in 2009,” Preqin Manager, Investor Data, Helen Kenyon said.
Although a growing number of PE investors are all set to return to the market in 2010, but challenges and risks of investments remain high during the period.
“In 2010, the challenge for fund managers will be firstly to identify potential sources of capital for their funds and secondly to secure commitments from those institutions.
“Standing out from the crowd will be vital in the year ahead and identifying a unique strategy that best takes advantage of prevailing opportunities will be essential,” Preqin added.
Private equity fundraising during 2009 has dropped to a five-year low of $246 billion. This is 61 per cent lower than $636 billion raised in 2008, according to Preqin.
“With a greater amount of investor capital available for new fund commitments this year compared to last, we expect fundraising in 2010 to show some improvement on 2009; however, investors are still cautious in their investments and it will
be a while yet before fundraising will even be able to approach the levels seen in 2006 and 2007,” Kenyon said.
The survey noted that distressed private equity and small to mid-market buyout funds continue to attract a significant degree of investor interest, with 35 per cent and 36 per cent of respondents citing these as areas of the market that present the best current opportunities respectively.
Source: NDTV Profit