Portico’s first research piece explores several existential challenges besetting the industry, and presents a humble call to action to shore up support for the industry.
Estudo sobre as 900 maiores empresas familiares do mundo - Credit Suisse 17 de jul 2015
O Credit Suisse lançou em julho/2015 um estudo sobre as 900 maiores empresas familiares do mundo. Vale a pena conferir as maiores por região e também os inúmeros casos como por exemplo o Wall Mart.
Thought leadership from Credit Suisse Research
and the world’s foremost experts
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Dow Jones VentureSource, Dow Jones LP Source, CB Insights, PitchBook, and Cambridge Associates.
Estudo sobre as 900 maiores empresas familiares do mundo - Credit Suisse 17 de jul 2015
O Credit Suisse lançou em julho/2015 um estudo sobre as 900 maiores empresas familiares do mundo. Vale a pena conferir as maiores por região e também os inúmeros casos como por exemplo o Wall Mart.
Thought leadership from Credit Suisse Research
and the world’s foremost experts
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Dow Jones VentureSource, Dow Jones LP Source, CB Insights, PitchBook, and Cambridge Associates.
Mercer Capital's Portfolio Valuation: Private Equity and Venture Capital Mark...Mercer Capital
Mercer Capital's Portfolio Valuation: Private Equity Marks and Trends Newsletter provides a brief digest and commentary of some of the most relevant market trends influencing the fair value regarding private equity portfolio investments.
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Thomson Reuters, VentureSource, CB Insights, PitchBook, and Cambridge Associates.
Exceptional Stock Market returns in Turbulent TimesAtul Khekade
This paper discusses historic patterns of Micro and Macro decisions and environment where the stocks have fetched exceptional returns in spite of the turbulent economic environment.
FTI: Scaling the Great Wall of Accounting issues in chinese reverse mergersasianextractor
We are very honored to be able to invite the Senior Managing Director of FTI Consulting (FCN US, MV $1.5bn), a billion-dollar NYSE-listed global forensic consulting firm, as a guest speaker in our SMU classes to share his knowledge and wisdom with the students in the Accounting Fraud in Asia course in Week 6, the week of 9th February. Over the years in the Asian capital jungles, the FTI people are amongst the few professionals whom I respect for their on-the-field expertise and thought leadership in the area of fraud and forensic investigation. I am sure that the talk will definitely make an impact for our SMU students who will learn not only invaluable lessons from the speaker’s knowledge and wisdom but also about FTI Consulting as their future career choice.
DealMarket Digest Issue137 - 17 April 2014Urs Haeusler
SEE WHATS NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 137 - April 17th, 2014:
- Cravings for Direct Co-Investment Still Strong
- Narrow Niches and Big Returns
- Australian PE Backed IPOs Outperform
- The Traits of Family Wealth Managers That Make Money…. and Lose it
- CEOs Get M&A Fever Again
- Quote of the Week: Betting on Justice
European Investment Fund, Invest Europe : Data-driven insights about VC-backe...Amalist Client Services
EUR 51bn in nearly 9000 Venture Capital-invested firms in 2007-15 : analyse their characteristics as well as subsequent performance.
VC cannot change the business reality where some firms make it while others cannot, but it can be the deciding factor in a start-up’s road to success. venture capital may not be that impactful for low growth companies.
December 2019
We believe in transparency which is why we love sharing information. Our first fund, CCMFI was a 1BN USD Fund-of-Funds investing into venture capital funds. These venture funds were usually between $30MM and $150MM in size. Typically CCMFI would take a LP position of $5MM-$50MM per venture capital fund. Other facts about CCMFI:
- $250MM in commitments to venture capital funds year 1
- Fully global: U.S based venture funds made up about half of the total geography covered
- At certain times over 60% of the GP fund managers can or have been female
- CCM took a small % of ownership in smaller investments to help secure them or speed up launch
Inside includes more information on the CCM's view on european venture, emerging markets, early stage investing, and the VC fund diligence process. If you are a fund manager and raising please email you fund information to info@cachettecapital.com
www.cachettecapital.com
Mercer Capital's Portfolio Valuation: Private Equity and Venture Capital Mark...Mercer Capital
Mercer Capital's Portfolio Valuation: Private Equity Marks and Trends Newsletter provides a brief digest and commentary of some of the most relevant market trends influencing the fair value regarding private equity portfolio investments.
The State of the Venture Capital Industry is an annual report produced by TrueBridge Capital Partners highlighting the trends in venture fundraising, investing, valuations, exits, and performance.
All data sourced from Thomson Reuters, VentureSource, CB Insights, PitchBook, and Cambridge Associates.
Exceptional Stock Market returns in Turbulent TimesAtul Khekade
This paper discusses historic patterns of Micro and Macro decisions and environment where the stocks have fetched exceptional returns in spite of the turbulent economic environment.
FTI: Scaling the Great Wall of Accounting issues in chinese reverse mergersasianextractor
We are very honored to be able to invite the Senior Managing Director of FTI Consulting (FCN US, MV $1.5bn), a billion-dollar NYSE-listed global forensic consulting firm, as a guest speaker in our SMU classes to share his knowledge and wisdom with the students in the Accounting Fraud in Asia course in Week 6, the week of 9th February. Over the years in the Asian capital jungles, the FTI people are amongst the few professionals whom I respect for their on-the-field expertise and thought leadership in the area of fraud and forensic investigation. I am sure that the talk will definitely make an impact for our SMU students who will learn not only invaluable lessons from the speaker’s knowledge and wisdom but also about FTI Consulting as their future career choice.
DealMarket Digest Issue137 - 17 April 2014Urs Haeusler
SEE WHATS NOTEWORTHY IN PRIVATE EQUITY THIS WEEK /// ISSUE 137 - April 17th, 2014:
- Cravings for Direct Co-Investment Still Strong
- Narrow Niches and Big Returns
- Australian PE Backed IPOs Outperform
- The Traits of Family Wealth Managers That Make Money…. and Lose it
- CEOs Get M&A Fever Again
- Quote of the Week: Betting on Justice
European Investment Fund, Invest Europe : Data-driven insights about VC-backe...Amalist Client Services
EUR 51bn in nearly 9000 Venture Capital-invested firms in 2007-15 : analyse their characteristics as well as subsequent performance.
VC cannot change the business reality where some firms make it while others cannot, but it can be the deciding factor in a start-up’s road to success. venture capital may not be that impactful for low growth companies.
December 2019
We believe in transparency which is why we love sharing information. Our first fund, CCMFI was a 1BN USD Fund-of-Funds investing into venture capital funds. These venture funds were usually between $30MM and $150MM in size. Typically CCMFI would take a LP position of $5MM-$50MM per venture capital fund. Other facts about CCMFI:
- $250MM in commitments to venture capital funds year 1
- Fully global: U.S based venture funds made up about half of the total geography covered
- At certain times over 60% of the GP fund managers can or have been female
- CCM took a small % of ownership in smaller investments to help secure them or speed up launch
Inside includes more information on the CCM's view on european venture, emerging markets, early stage investing, and the VC fund diligence process. If you are a fund manager and raising please email you fund information to info@cachettecapital.com
www.cachettecapital.com
Mercer Capital's Value Focus: Venture Capital | Mid-Year 2016Mercer Capital
Mercer Capital's Venture Capital newsletter provides perspective on some of the most relevant market trends affecting venture capital firms and other financial sponsors.
Randy Kerns, CIC, ChFC • Voya Financial Advisors Inc.
- Why passive investors get hammered by Mike Posey
- Can it really be earnings season already?
- What oil's plunge and the strong Dollar may mean for 2015 by Jeanette Schwarz Young
- Active management as a practice differentiator (John McGonagle, CFP, CRPC, Asset Architects LLC)
Journal of Applied Corporate Finance • Volume 22 Number 2 A Mo.docxpriestmanmable
Journal of Applied Corporate Finance • Volume 22 Number 2 A Morgan Stanley Publication • Spring 2010 1
It Ain’t Broke: The Past, Present, and Future of Venture Capital
BT
by Steven N. Kaplan, University of Chicago Booth School of Business
and NBER, and Josh Lerner, Harvard Business School and NBER*
he U.S. venture capital (VC) industry is currently
subject to a great deal of uncertainty and contro-
versy. Some observers and practitioners believe
that the VC model is broken and that the U.S.
VC industry needs to shrink.1 In this paper, we put the U.S.
VC industry into its historical context, assess the current state
of the VC market, and discuss the implications of that history
and the current conditions for the future.
We begin by describing the fundamental problem that
entrepreneurs face and VCs need to solve in order to invest
successfully. There is a great deal of evidence to support what
is now a highly developed theory of how the U.S. VC model
provides an efficient solution to this basic problem of entre-
preneurial finance. And there is little doubt that the U.S.
venture capital industry has been very successful. A large
fraction of IPOs, including many that are now among the
most successful public companies in the world, have been
funded by VCs. And, where possible, the U.S. VC model has
been copied around the world.
Next we look at the historical patterns of commitments
to U.S. VC funds and investments in companies by those
funds. U.S. VC investments in companies have represented
a remarkably constant 0.15% of the total value of the stock
market over the past three decades—the period for which we
have reliable data. Commitments to VC funds, while more
variable, have been consistently in the 0.10% to 0.20% range.
These percentages have not changed in recent years.
Third, we consider the historical record on VC fund returns,
paying particular attention to returns of post-2000 “vintages.”
Contrary to the popular impression, we do not find that returns
to VC funds this decade have been unusually low (or high)
relative to the overall stock market. This is true despite the
relatively low number of IPOs. Overall, VC investment and
returns have been subject to boom-and-bust cycles over time.
Based on our historical analyses, we make some observa-
tions about the current situation and consider what is likely to
happen going forward. The level of commitments to and the
investment pace of VC funds since 2002 have been consistent
with the long-term historic averages. At the same time, the
returns relative to the overall stock market appear to have
been roughly average. This does not suggest to us that there
is too much money in U.S. VC, or that the VC model is
broken. Instead it appears to reflect the natural evolution of
a relatively competitive market.
In fact, given the unusual and unexplained paucity of IPOs
between 2004 and 2007, we argue there is more upside than
downside for the VC vint ...
Mercer Capital's Asset Management Industry Newsletter | Q1 2015 | Focus: Mutu...Mercer Capital
Mercer Capital’s Asset Management Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to asset managers, trust companies, and investment consultants.
SPAC: veterans in the States, novices in Europe?Andrea Mennillo
How can we stimulate but also efficiently channel financial resources to profitable economic activities?
In this regard, I would like to devote a brief discussion to a very interesting investment instrument that has been active in the U.S. market for some time now, but, perhaps, that is still in the twilight in the European market. I'm referring to the SPAC, which stands for Special Purpose Acquisition Company. This is a mode of investment similar to classic private equity, but much more flexible and, for this very reason, it is gaining momentum in the States.
Despite being a tool that has been around for a few years, the European market, is still proving lukewarm to this mode of investment.
China Investment Environment - Start-up/Growth Company Finance Market in Chin...Team Finland Future Watch
Report summarizes the start-up and growth company finance market in China. The report consists of analysis and views of the present state of the start-up/growth company finance market in China as well as views of the future trends and implications of those. Then, advise to the Finnish public sector, companies and VCs is provided.
What does 2017 hold for the Innovation Economy? In the latest State of the Markets report, SVB Analytics took a rear-view approach, identifying the factors that mattered most in 2016 and examining which trends and themes will play out in 2017.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the what'sapp contact of my personal pi vendor
+12349014282
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
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I will leave the what's app number of my personal pi vendor to trade with.
+12349014282
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the what'sapp contact of my personal pi merchant to trade with
+12349014282
Portico Advisers: Is Emerging Markets Private Equity Dying?
1. Is Emerging Markets
Private Equity Dying?
Michael Casey
Founder & Managing Director
November 2016
porticoadvisers.com
2. Introduction
1 Is EM PE Dying? | | November 2016
Periodically o er e la e years, one a i question o ld burrow its way into my mind:
is the e er i markets private equity industry (“EM PE”) dying?
Some of the data told a straightforward story: stagnant volumes of capital being raised by fewer
and larger managers; a smaller number of funds achieving a final close. In other instances, a
news story would cross my screen and leave me befuddled. IFC committed to CDH Fund V? The
African Development Bank committed to Carlyle? I don’t know the rationale for these decisions,
and I’m certainly not passing judgment on them. They did, however, spark a curiosity to examine
EM PE’s vital signs.
The prognosis that follows suggests that existential challenges are besetting the industry,
despite its continued viability as an attractive asset class that can create value for investors and
investee companies alike. I worry that fewer entrepreneurs will access the human and financial
capital they need to grow, fewer people in emerging markets will find jobs, and we all will
continue into the morass of secular stagnation.
I hope that you enjoy this piece, and that it kindles a search for solutions o e i d ry
c alle e . o lea e drop us a line and let us know what you think—we’d love to hear from
you.
Best wishes,
P.S. As Roger Leeds, founding Chairman of EMPEA and Professor at Johns Hopkins SAIS, notes
in his book on the asset class, a health warning is warranted on EM PE data. Caveat lector.
Contents
Where are we in the industry life-cycle? | 2 |
Are new firms entering? | 9 |
Are stragglers leaving? | 17 |
Are there substitutes? | 20 |
Are legal and regulatory policies
supportive of industry growth? | 25 |
Where are we going? | 28 |
4. The EM PE industry is not growing
a
Following rapid growth at the end of the last decade—and a swift recovery on the heels of the global financial
crisis—the volume of capital raised annually has been stagnant since 2011
7
3 5 7
26
33
58 57
23
37
48
41 42
57
47
15
2001 02 03 04 05 06 07 08 09 10 11 12 13 14 15 1H 16
Total capital raised ($B)
Source: EMPEA, Portico Advisers3
106%
CAGR
- 0.6%
CAGR
Emerging Growing Shakeout Maturing Declining?
China’s expansion,
commodity supercycle,
global search for yield
EMs take over as engine
of global economy, easy
liquidity conditions
China slows,
commodities hit,
liquidity cycle turns
Consolidation within the
industry as number of
“zombie” funds grows
Is EM PE Dying? | | November 2016
5. Afundraising slowdown is visible across regions
Outside of Sub-Saharan Africa and the MENA region, PE fundraising hauls peaked in 2011 / 2012
0
5
10
15
20
25
30
35
Emerging Asia CEE & CIS Latin America MENA Sub-Saharan
Africa
Multi-region
Private equity fundraising by region and strategy ($B), 2009-15
Source: EMPEA, Portico Advisers4 Is EM PE Dying? | | November 2016
6. Fewer private equity funds are achieving a close
a
While an average of ~ 25 buyout funds achieve a close each year, there has been a 30% decline for growth
equity funds since 2010
128
87
0
20
40
60
80
100
120
140
160
2009 2010 2011 2012 2013 2014 2015
#ofFunds
# of PE funds achieving a close by strategy
Buyout Growth
Source: EMPEA, Portico Advisers
Note: Excludes Venture Capital, Infrastructure & Real Assets, and Private Credit funds5
>30%
decline
Is EM PE Dying? | | November 2016
7. Capital is concentrating in fewer funds …
a
Fund vehicles ≥ $1 Billion in size are capturing a larger share of EM PE fundraising, while constituting only
7% of the total number of funds achieving a close in a given year (on average)
$6.2
$12.9 $15.7
$16.3 $16.1
$29.6
$14.5
0%
10%
20%
30%
40%
50%
60%
70%
2009 2010 2011 2012 2013 2014 2015
%ofTotalPECapitalRaised
% and volume of capital raised by PE funds ≥ $1B in size
Source: EMPEA, Portico Advisers6 Is EM PE Dying? | | November 2016
8. … and in larger segments
Leading to questions regarding a potential mismatch between capital flows and the landscape of investable
companies in certain markets
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Emergi
ng Asia
Latin
Americ
a
Sub-
Saharan
Africa
Multi-
Region
CEE &
CIS
MENA
Volume of capital raised by region and fund size, for vintage years 2012-16
≥$1B
$700m-$999m
$500m-$699m
$250m-$499m
$100m-$249m
<$100m
Source: EMPEA, Portico Advisers7
Emerging Asia Latin America
Is EM PE Dying? | | November 2016
9. 8
Apreemptive dispelling of criticism
Is EM PE Dying? | | November 2016
I received some gentle pushback on this issue of capital concentration when I wrote an article
about Sub-Saharan Africa’s private equity landscape two years ago. To be clear:
– The problem is the thinning out of small-cap and mid-market funds, not the fundraising
successes of larger funds. Many of the larger funds are managed by excellent firms,
and their ability to scale offers a potent demonstration effect.
– The diminished number of small-cap and mid-market funds is a shame because there
are companies in need of expansion capital and business expertise, and they’re not
able to secure it. Moreover, it reduces future deal flow for larger funds.
– The available data do suggest that the pools of investable companies at larger
segments look relatively shallow, but that could be because there are, indeed, too few
companies in the formal sector; or simply because obtaining quality data remains an
onerous task.
– The focus on investable companies misses the broader evolution underway, in which
fund managers are deploying capital into platforms and companies that do not yet
exist (more on this point later). In addition, it underplays the volume and tranches of
capital that some EM companies require to achieve scale.
– Objectively, there is a non-zero risk that the concentration of capital in larger
segments could lead to poor performance. But investors generally know the peer
groups of larger managers that are coming to market (often at the same time), and
they have placed their trust in these managers’ ability to execute their investment
strategies with discipline.
11. Fewer first-time funds are achieving a final close
Growth equity funds, in particular, are being pummeled as the private capital ecosystem is beginning to
take the shape of a barbell—more VC and large-cap funds, leaving a thinned-out middle market
10
4
9
5
34
25
26
19
24 18
13
8
7
14 13
12
9
13
2008 2009 2010 2011 2012 2013 2014
# of first-time funds holding a final close by strategy
Venture Capital
Growth
Buyout
Source: EMPEA First-time Funds in Emerging Markets Brief, Portico Advisers
Note: Growth includes mezzanine funds10
- 10%
CAGR
Is EM PE Dying? | | November 2016
12. And they’re not getting help from DFIs
DFIs are committing to more Funds IV+ than to Funds I, II or III, raising questions about GP viability,
a DFI “flight to quality,” and the amounts of commercial capital that DFIs are catalyzing
0
10
20
30
40
50
08 09 10 11 12 13 14 15 16
#ofDFICommitments
Fund I Fund IV+
Source: EMPEA, Preqin, Portico Advisers
Note: Includes 12 DFIs; fund # is based on the total number of funds that a firm has raised,
not simply sequential funds in a series; data through 1H 16 or latest available
11
08 09 10 11 12 13 14 15 16
Vintage Year
Fund II Fund IV+
08 09 10 11 12 13 14 15 16
Fund III Fund IV+
Is EM PE Dying? | | November 2016
13. 0
1
2
3
4
1 10 100 1,000 10,000
Fund#
Fund size ($m)
log scale
DFI Commitments by fund #, size, and region, for vintage years 2006-16
CEE & CIS
Emerging Asia
Latin America
MENA
Sub-Saharan Africa
Multi-region
Source: EMPEA, Preqin, Portico Advisers
Note: Includes 12 DFIs; fund # is based on the total number of funds that a firm has raised,
not simply sequential funds in a series; data through 1H 16 or latest available
12
+
Is EM PE Dying? | | November 2016
14. Alack of established GPs inhibits new commitments
0%
10%
20%
30%
40%
50%
60%
China India Southeast Asia CEE Brazil Latin America
(ex. Brazil)
MENA Sub-Saharan
Africa
% of LPs noting that a limited # of established GPs deters commitments to said market
2012
2013
2014
2015
2016
Source: EMPEA Global Limited Partners Surveys, Portico Advisers13 Is EM PE Dying? | | November 2016
15. Despite clear opportunities for alpha in early funds
The dispersion of returns historically exhibited by earlier funds illustrates the precise opportunity for LPs
to be in EM PE—inefficiently priced assets, with clear benefits to astute manager selection
-20
-10
0
10
20
30
40
Fund I Fund II Fund III Fund IV Fund V & Above
NetIRR(%)
EM PE fund net IRRs by fund #, for vintage years 2000-09
Source: EMPEA First-time Funds in Emerging Markets Brief, Cambridge Associates, Portico Advisers
Note: Net to LPs, as of 31 December 201414
Top 5%
Top Quartile
Breakpoints
Median
Lower Quartile
Bottom 5%
Is EM PE Dying? | | November 2016
How many gatekeepers / OCIOs
recommended these funds?
16. 14
11
7
31
23
19
Investing in a
first-time fund
First investment in a
seasoned fund
Re-up
Average # of days LPs spend on due diligence, by experience with fund and LP size
Small LPs
Large LPs
Source: The Importance of Size in Private Equity: Evidence from a Survey of Limited Partners,
Marco Da Rin and Ludovic Phalippou 2016, Portico Advisers15 Is EM PE Dying? | | November 2016
17. Larger LPs
– Are deploying volume …
– Are culling their GP relationships …
– Are targeting established GPs with a demonstrated ability to
operate at scale …
– Are seeking GPs with a track record of returning capital with
low loss ratios
Smaller LPs
– Are right-sized for commitments to funds that can deliver alpha …
– But lack resources for manager selection …
– Or even ownership over the decision (i.e., use of gatekeepers or
OCIOs) …
– And need access to more—and better quality—information on the
asset class and the fund manager landscape
Source: Portico Advisers16 Is EM PE Dying? | | November 2016
19. 0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
1.4x
1.6x
1.8x
2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010
U.S. Private Equity EM Private Equity & VC
DPIMultiple
Net distributions to paid-in capital multiple (DPI), by vintage year and quartile
Upper Quartile
Median
Lower Quartile
Source: Cambridge Associates, Portico Advisers
Note: Data as of 31 March 201618
U.S. Private Equity
Is EM PE Dying? | | November 2016
20. 137
176
Fund managers
achieving a close between 2005-09
Fund managers
raising a subsequent fund
EM PE fund managers achieving a close between 2005-09 that raised a subsequent fund
313
failed to raise a follow-on fund
Source: EMPEA, Portico Advisers
Note: Excludes Venture Capital, Infrastructure & Real Assets, and Private Credit funds19 Is EM PE Dying? | | November 2016
22. 0
20
40
60
80
100
120
140
2009 2010 2011 2012 2013 2014 2015
#ofFunds
# of PE funds achieving a close by strategy
Buyout
Growth
Venture Capital
Private Credit
Source: EMPEA, Portico Advisers21 Is EM PE Dying? | | November 2016
23. 4
8
10
8
10
2011 2012 2013 2014 2015
# of “impact investing” EM PE funds closed
Source: EMPEA, Portico Advisers22
Who is an “impact investor”?
– Global growth markets PE firm The Abraaj Group is
positioning itself as one
– KKR’s investment in Modern Dairy helped bring a
safe supply of milk to millions of consumers
– Pan-EM PE firm Actis helped its portfolio company
Umeme connect more than 120,000 Ugandans to
the country’s electrical grid
– “Impact” firm LeapFrog invested alongside PE firm
India Value Fund Advisors* in Magma Fincorp, a
KKR portfolio company
– Helios Investment Partners led a consortium of
investors to build out Africa’s telecom infrastructure
with Helios Towers Africa
– (there are *countless* others)
* The investment was made by Indium V, an investment vehicle advised by India Value Fund
Is EM PE Dying? | | November 2016
24. 74%
49% 48%
Seek
co-invest
Invest in
first-time fund managers
Seek direct
investment opportunities
% of LPs indicating preferred means for accessing EM PE opportunities
Source: EMPEA 2016 Global Limited Partners Survey, Portico Advisers23 Is EM PE Dying? | | November 2016
25. Source: CDPQ, Thomson Reuters Zawya, Portico Advisers
Note: Platform company officially announced 9 September 2016, diagram for illustrative purposes only24
Investors
Corporate SponsorPE Sponsor
Platform Company
– Targets controlling stakes in Indian power generation companies
(conventional thermal, hydroelectric, and transmission assets)
– Focuses on operating and near-operating assets with acquisitions
anticipated to take place over next two-to-three years
– Initial capital injections of up to $850m, with option to upsize
Capital
+
Expertise
Capital
Is EM PE Dying? | | November 2016
27. Source: OECD, Willis Towers Watson, The Commonwealth, MFW4A and EMPEA Pension
Funds and Private Equity: Unlocking Africa’s Potential, Portico Advisers
–
26
North America &
Western Europe
> $21T
in pension assets, with
regulatory complexity
being layered on
- AIFMD
- FACTA
- SEC
- Solvency II
- Volcker Rule
- ESG
- Brexit
Emerging Markets
> $2T
in pension assets, with
regulators generally keen
to facilitate investment
- Enabling pension funds
& insurance co’s to
invest in PE
- Innovative structures
for DC plans to pursue
long-term investments
- State-supported PE &
VC ecosystems (i.e.,
China, Brazil)
Is EM PE Dying? | | November 2016
28. Beyond track record, what are you most concerned
with?
0%
10%
20%
30%
40%
50%
60%
70%
2014 2015
Team stability
Proven operational
excellence
Clear strategy
Reporting
Were you subject to a regulatory audit or
examination in the past two years?
72%
59%
53%
28%
41%
47%
2013 2014 2015
Yes
No
Source: EY 2016 Global Private Equity Fund and Investor Survey, Portico Advisers27 Is EM PE Dying? | | November 2016
30. Source: Portico Advisers29 Is EM PE Dying? | | November 201629
Traditional PE Funds
– Standard fixed-life (i.e., 10-
year), blind pool, closed-
end fund
– Likely to remain the
preferred vehicle for
established GPs, large LPs,
and DFIs
Platform Companies /
Deal-by-Deal Funds
– Allow firms to mobilize
capital for a single
opportunity
– Reduces amount of time
spent fundraising and can
foster strong relationships
with investors
Evergreen /
Listed Vehicles
– Allow firms to raise
permanent capital
– Likely to grow in popularity
for asset managers offering
multiple strategies (e.g.,
equity, mezzanine, credit)
Pledge Funds
– Enable firms to build a
track record while giving
investors the option to
pass on deals
Hybrid Funds
– Provide flexibility to pursue
opportunities across public
and private markets (e.g.,
hedge funds employing
side pockets for illiquid
investments, PE firms
executing PIPEs)
Corporate Partnerships /
Joint Ventures
– Team with multinationals to
de-risk acquisitions /
validate entry in new
markets
31. 1
4 4
5
6
7
13
6
15
9
0
2
4
6
8
10
12
14
16
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Private capital fundraising ($B, #)
Capital raised via LP-GP structures Capital raised via CKDs # of fund closes
Source: EMPEA Special Report: Private Equity in Mexico, Portico Advisers–30
Local capital has a number of intrinsic advantages in
EM PE, but it is still quite nascent
Local capital’s role in building a PE ecosystem:
The case of pension funds (“Afores”) in Mexico
Advantages
– Ticket sizes are aligned (for now) with the size of many fund
managers active in emerging markets
– Local presence facilitates discovery and due diligence of fund
managers
– Local currency vehicles can minimize FX risk to the LP
Constraints
– The asset class is opaque and not well understood; more efforts
to educate and share knowledge are required
– Regulatory changes take time to implement
– Portfolio management experience / expertise is in short supply
Afores
permitted
to invest in
PE via CKDs
Capital call
scheme
introduced
Is EM PE Dying? | | November 2016
32. If the objective were to achieve the
best risk-adjusted return, starting a
rocket company would be insane.
But that was not my objective.
— Elon Musk
Source: Y Combinator How to Build the Future–
33. 32 Is EM PE Dying? | | November 2016
When I began my research into the question animating this piece, I had a hypothesis that the
industry was in ill health. Yet some of the findings were surprising. I hadn’t realized the extent to
which DFIs were still supporting established fund managers. I hadn’t appreciated how under-
resourced smaller LPs were vis-à-vis their larger brethren. I adn’t fathomed the sheer volume
of ”zombie” funds.
It seems clear that smaller LPs could benefit from allocations to quality GPs operating in lower
market segments, but many have outsourced their decision-making processes, or simply lack the
time and resources to do their homework. Local capital is a critical long-term solution, but there
is a chasm between today and that idyllic future.
I doubt that the market failures on display in this piece will be solved without an open discussion
of them. But concerted efforts to tackle these challenges head on should help to truncate this
stage of the cycle, and build a firm foundation for the next phase of the industry’s growth.
In the meantime, some more food for thought:
– Is institutionalization of the asset class killing the industry?
– Why are smaller LPs participating in the trend toward agglomeration and bureaucracy
(through the use of gatekeepers and OCIOs), and surrendering their edge of agility?
– Given recent questions over the veracity of top quartile persistence, and the rapidity with
which emerging economies are transitioning, is track record even less relevant in EM PE?
34. 33 Is EM PE Dying? | | November 2016
An Open Invitation to LPs Managing ≤ $1B
Portico Advisers extends an open invitation to any institution managing ≤ $1B in total AUM to reach out and participate in an introductory call with our
team. During the call, we would aim to identify whether there are specific knowledge gaps that we can fill, and we would explore structuring an
engagement for you on a complimentary basis.
Fund Managers
– Develop a value proposition
that clearly differentiates
your offering from your
competitors’
– Map your strategy and fund
size to the investable
landscape of companies in
your geographies
– Strengthen your brand in a
world of democratized
discovery
– Support and contribute
data to industry associations
Institutional Investors
– Seek out fresh ideas on
potential investment
partners
– Pressure gatekeepers and
OCIOs to justify their fees,
and identify funds that
expand your institution’s
efficient frontier
– Consider EM funds of funds
– Share knowledge and best
practices with peers at
home and abroad
Stakeholders
– Create knowledge and
provide greater
transparency on the asset
class, including through
Internet-based platforms
– Open dialogue and build
relationships with
institutions that are
unfamiliar with EM PE
– Work with regulators and
policymakers to facilitate
SMEs’ access to financial
and human capital
Everyone
– Let us know what you think
about this piece and the
state of the industry
– Sign up for Portico’s
newsletter to receive
periodic think pieces and
updates
– Follow Portico on Twitter
– Share this piece with friends
and colleagues
– Let us know how we can be
helpful