More than half of private equity investors plan to put more money in emerging markets, expecting higher returns from deals in these economies than ones in sluggish Western markets, a survey found.
About 57 percent of investors expect to increase allocations to markets — including China, India and Brazil — over the next two years, a survey released yesterday by private equity firm Coller Capital and the Emerging Markets Private Equity Association (EMPEA) said.
“Investors are clearly drawn to markets with strong underlying growth, which trumps leverage in driving returns,” EMPEA president and chief executive Sarah Alexander said.
Advent International last week said it had raised US$1.65 billion for deals in Latin America, and Carlyle said it had raised US$2.55 billion for Asian investments, bucking tough fundraising conditions to beat previous fund sizes.
Many investors see emerging market investments outperforming European and US markets. More than three quarters expect emerging market net returns to exceed 16 percent over a three to five-year period, compared with 29 percent seeing similar returns from their global portfolio, the survey found.
“In a number of these markets, particularly China, India and Brazil, the environment has changed; there’s more stability, there’s better governance, there are more factors allowing for those returns to be generated,” Coller partner Erwin Roex said.
A fifth of investors expect emerging markets net returns to exceed 25 percent, a figure in keeping with returns from European and US buyout firms during the buyout boom.
“Over the long term, markets which are growing at 7, 8, 9 percent are going to provide a more exciting environment for outperformance,” said Richard Laing, CEO of the British Government-backed emerging markets investor CDC Group.
As Western economies edge back into growth, China last week posted stronger than expected annual growth of 11.9 percent in the first quarter. India is expected to grow 8.5 percent in the current fiscal year.
CDC Group, which reports its full-year results today, has seen its performance rebound last year, Laing said.
The group’s portfolio lost 13 percent of its value in 2008 as company valuations fell.
While perceptions of better returns are pushing investors into emerging markets, they also now realize that debt-laden deals in Western markets carried higher risks than previously assumed, Roex said.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
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