Private markets and emerging states: assessing the state of play
Our aspiration to support states to attract transformative amounts of investment includes the movement of capital. We spent nine months speaking with 70+ institutional investors and investment managers to increase their awareness of our focus states as investment destinations, and better understand their allocation strategies.
We spoke to investors from our network in London, Edinburgh, New York, Washington DC, Zurich, Geneva, Cape Town and Johannesburg. The output was both informative and instructive:
Private equity is a huge and growing industry, but emerging states such are not participating as much as they could. Commercial investors are well supplied with opportunities to invest in developed markets where private markets have a history of strong financial performance that emerging states cannot match. Without the precedent of repeated and successful financial return, commercial investors have insufficient incentive to move allocations to emerging states from elsewhere.
Yet, by providing investors with a credible local counterpart in smaller and more frontier markets, it is possible to increase allocations and subsequently create precedent and prove viability. In addition, emerging states can position themselves as destinations for socially oriented capital, aiming to achieve both profit and purpose.