Walkers, a global offshore law firm for investment banks, international law firms, collateral managers and other financial institutions, expects the global private equity market to continue its growth, led largely by continued interest in emerging markets such as India, China and the Middle East.
Other factors, according to the firm, are U.S. private equity firms’ desire to engage in more international deals, and more deals focused on the middle-market, instead of solely high-end mega deals.
“As U.S. private equity firms look internationally for deals, and investors in Europe continue to expand their portfolios, the global picture for private equity continues to be strong,” said Iain McMurdo, investment funds partner for Walkers. “Markets such as Dubai, India, and China continue to mature, opening to outside investors, and local companies are partnering with U.S. and European managers to use offshore structures to increase their opportunities for foreign investment. These changes are good for offshore financial centers such as the Cayman Islands, Jersey, Dubai and the British Virgin Islands that can offer neutral jurisdictions for complex deals involving parties from multiple countries.”
Globally, private equity investments in the emerging markets of Asia, Eastern Europe, Latin America, the Middle East and Africa rose by 29 percent in 2006 to a total of US$33.2 billion, according to the Emerging Markets Private Equity Association (EMPEA). Asia attracted the greatest amount of capital, with US$19.4 billion raised, with 35 percent of those funds in China and India alone. The Middle East saw a 54 percent increase in private equity investments.