Reflecting on the last ten years of SuperReturn Emerging Markets is fascinating. It highlights how much emerging economies have been through, the markets that have moved in and out of favour, and the topics that have remained firmly on the agenda throughout the years. A number of new topics have also entered and left the frame, this year being no exception.
The old favourite we can’t shake off: LP sentiment
Things are looking up. If the results from EMPEA’s recent LP survey are anything to go by, emerging market private equity managers should be optimistic: LPs are looking to increase the dollar value of their commitments to emerging economies – the highest proportion since 2014. We at SuperReturn have also heard this first hand from several investors.
What else have we learnt from LPs in preparing for this year’s event? The age-old question of emerging market private equity performance and how it is justifying its place in an alternatives portfolio remains ever present. Diversification seems to be a significant driver. And, of course, the numbers are important. But more often LPs are questioning the benchmark rationale and asking if comparing the performance of emerging market and developed market private equity is not dissimilar to comparing apples with oranges.
- Anouk van der Boor, Cambridge Associates, will unlock the data and explore what conclusions investors can draw on the best metrics to benchmark.
- Seasoned investors share their view on what they want from their exposure to growth markets in an era of outstanding returns in US private equity and whether it Is it reasonable to demand a risk premium from all non-traditional markets.
In addition to allocations to emerging markets, the direction of capital deployment remains a key question. Asia still attracts the lion’s share of capital, but we have learnt that other regions are getting more air time today, notably South America and Central and Eastern Europe. Furthermore, with many investors expressing an increased appetite for impact focused funds, technology, venture capital, credit, and secondaries, it’s an extremely interesting time for emerging economies and less-vanilla strategies. Only time will tell if this interest manifests into actual commitments. In the meantime, I think it’s fair to say we can be cautiously optimistic.
- Siemens Private Equity, Employees Retirement System of Texas, CDPQ amongst others will share their views first hand on current appetites for investing.
The new kid on the block: technology disruption
The technology revolution is sweeping across the globe and emerging markets are certainly not immune. In fact, these markets arguably sit in the most interesting position bearing witness to the leapfrogging effect, and any savvy investor will be keeping abreast of the developing interplay of technology between emerging and traditional markets.
It’s not just private equity funds capitalising on this wave. The impact of Alibaba, Tencent and SoftBank and other large strategics on the tech ecosystem is also front of mind for many. Recent news of SoftBank’s Vision Fund, according to the Financial Times, making further headway towards its $100 billion target is not small fry. The role of strategics could have profound implications on the investment landscape and is something we plan to address this year.
- Don’t miss Winston Ma Wenyan on moving from a mobile to digital economy in China, the frontrunner in tech innovation and penetration.
- Guest speaker and serial entrepreneur, Nicklas Bergman, will give a more holistic view on the tech revolution and where emerging markets sit within this.
- We pose the tech question to heavyweight GPs and explore how private equity is positioning itself to capitalise on this seismic trend and the impact of strategics.
Add increasing protectionism and authoritarianism around the world, an evolving private equity industry, and increased amount of capital available to accelerating disruption through technology, who knows where we will be in the next 5 years. SuperReturn Emerging Markets is ready to answer some of these questions. Come and join us!