Barnes_2003_Abnormal Returns in Emerging Equity Markets_Dissertation
EMERGING MARKETS PRIVATE EQUITY QUARTERLY REVIEWkaahlsfiles.com/thesis/thesis papers/1...
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Emerging Markets Private Equity Association
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EMERGING MARKETS PRIVATE EQUITYQUARTERLY REVIEWA Publication of the Emerging Markets Private Equity Association
TABLE OF CONTENTS
In This Issue ...... 1
..... 13Global Private Equity
Conference Sells Out
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Published by EMPEA with assistance from Liberty Global Partners, LLC
While investors have been feeling pain from the sharp six-week decline in emerging
market stock exchanges around the world, the World Bank's recently published
Global Development Finance report indicates that those same exchanges have
increased in value from US$1.7 trillion in 2002 to US$4.4 trillion in 2005. The
report also details how US$6.14 billion was invested in emerging market equities in
2005 and an additional US$237.5 billion was placed in direct investments. In
previous corrections, uncertainty in public markets choked off all investment
activity, but today investors seem to have a longer-term view, and IPOs, bond
issues, and private equity investments are still moving forward. The World Bank
report is a timely reminder that emerging market economies are now deeper and
more fundamentally sound than ever before.
In this issue, our country feature covers China, where the first five months of 2006
private equity investments were a remarkable US$4.96 billion, with no signs of
diminishing. The continuing attraction of the China market is linked in large part to
an enormous improvement in returns over the past few years, as shown in the
Cambridge Associates' emerging markets benchmarking data, which we analyze in
this issue. The achievement of scale in emerging markets private equity is also now
attracting the attention of secondaries market players, which is explored in our
feature on the subject. Long-term confidence in emerging markets private equity
was also a key theme of discussions at the sold-out IFC/EMPEA annual conference
held in Washington, DC in May, which is reviewed in these pages. With a tone of
caution, however, Richard Laing of the CDC argues in a guest article that long-term
growth and success in private equity requires fundamental reform in private equity
structures and incentives. Finally, investors would be unwise to ignore completely
the recent public market corrections, which impact private equity exits, portfolio
valuations and overall confidence. EMPEA will continue to monitor these
developments and report our findings to you.
-- Roger Leeds, Chairman, EMPEA
IN THIS ISSUE
..... 16Upcoming Events of Interest
Emerging Markets Private Equity
Quarterly Review is a quarterly
publication of the Emerging
Markets Private Equity Association.
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All contents © 2006 Emerging
Markets Private Equity Association.
All rights reserved.
Volume II, Issue 2, Q2 2006
EMPEA Board / Advisory
Board
..... 16
New Charter Members ..... 16
..... 15EMPEA Member News
Guest Article: Fee Structures
Must be Reformed for Better
Alignment of PE Incentives
..... 11
..... 14Emerging Markets Private
Equity Exits & IPOs
Country Feature: China ...... 1
China's private equity market is booming, with US$4.96 billion of private equity
investments completed in the first five months of 2006, compared to US$4.04
billion for all of 2005.1 The venture capital (VC), growth capital and buyout
segments all received tremendous interest. While market observers still feel there is
opportunity in each of these segments, it remains to be seen whether money can be
made over the long term, how well the US VC model adapts to China, and whether
a buyout market will truly take shape.
The dynamics of China's private equity market are also blurring the lines between
the traditional VC and buyout segments. Key to future returns may be how well
traditional players adapt to the particular growth equity opportunities in China, and
how the new generation of Chinese private equity professionals will fare as they
begin to take the reigns of their own private equity funds. China is a land of private
equity opportunity, but the private equity space is evolving rapidly, and
continued on page 2
COUNTRY FEATURE: CHINA, THE NEW WILD EAST
...... 7Secondary Buyers Start
Shopping Emerging Markets
..... 10EM Private Equity Benchmark
Continues Its Ascent
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Vol II, Issue 2 - Q2 2006 | Page 2EMERGING MARKETS PRIVATE EQUITY
many questions remain about how the asset class will take root
in this new wild East.
The Booming China Private Equity Market
China's private equity boom has been driven by strong returns
and a series of high-profile exits over the past two years. The
Asia Private Equity Review (APER) reports that US$1.86
billion was returned to LPs in 2005 through 48 exits, including
high profile transactions, such as Baidu's listing on NASDAQ,
which gained 354% on its first day of trading, and China
Construction Bank's debut on the Hong Kong Stock Exchange
(HKSE), which raised US$8 billion.
According to APER, almost half of the 2005 exits had IRRs of
more than 200%. Driven by these staggering returns, private
equity investments are expected to surpass US$6 billion in
2006, which may push China past Japan in terms of invested
private equity capital.
The HKSE has proven to be a preferred destination for Chinese
IPOs, with businesses from mainland China now accounting for
half the market value on the exchange. NASDAQ and the NYSE
are also favored IPO destinations, and it is noteworthy that in May
of 2006 the Singapore Exchange listed its 100th Chinese company.
Much of the China opportunity stems from the government's
strong commitment to privatization. Twenty five years ago, 85%
of the Chinese economy was dominated by state-owned
enterprises (SOEs), while today SOEs account for only 40% of
economic activity. The Chinese government's commitment to a
thriving private sector has attracted strong growth in foreign direct
investment by US and European corporates and has also created
space for a viable SME sector. Companies with less than US$40
million of revenue now contribute 55% of Chinese GDP, and
approximately 80% of these companies are reportedly profitable.2
It appears that the roots of private equity are getting stronger in
China, although most funds from the first wave of private
equity moving into China in the 1990s have struggled. A core
theme from that earlier period was the reform of the China SOE
sector, but getting control of a Chinese company proved to be
difficult for many. While interest in the SOE sector remains among
the buyout players attracted to the size of the opportunities, the
current wave of investing is characterized more by growth capital
investing in support of China's growing class of entrepreneurs.
Venture Capital Goes East
China's impact on the venture capital industry will be a key
trend to observe. Venture capital has always been about
investing in the backyard -- smart (or not so smart) investors
working shoulder to shoulder with entrepreneurs they trust and
taking stakes in technology and businesses where there is an
intimate understanding of the risks and possibilities. However,
the China market seems to be luring venture capitalists away
from a traditional local focus, and 2006 appears to be the year
that Silicon Valley goes East.
US, European, and Israeli venture capitalists are setting up their
own China entities, or entering joint ventures with Chinese
funds. Veteran Silicon Valley champions, such as Granite
Global Ventures and Doll Capital Management, have made a
string of China venture bets, often as affiliate investors
represented by local Chinese partners.
This year, Accel Partners teamed up with IDG Technology
Venture Investment for a US$290 million China-dedicated
fund, and Ignition Partners teamed up with Qiming Venture
Partners. Sequoia Capital has announced a new US$200 million
China fund and led a US$30 million investment into a Chinese
start-up called Worksoft.
Many private equity practioners emphasize the need to
understand the particularities of the Chinese venture market.
Hidden Jade Capital recently invested in a Chinese software
company called StarSoftcomm, which provides PC
management services, primarily to Chinese OEMs and
enterprises. Darren Ho, a founding partner of Hidden Jade,
continued on page 3
PE Funds Raised 2005:
PE Investments 2005:
PE Investments 2005: (As % of GDP) # of Exits 2005:
Returns to LPs 2005:
Source: Asia Private Equity Review (APER)
CHINA PRIVATE EQUITY AT A GLANCE
US$2.24 billion
US$4.04 billion
0.18%
48
US$1.86 billion
2003
TOTAL INVESTED CAPITAL FOR CHINA PRIVATE EQUITY PER ANNUM
(US$ billions)
2004 2005
Source: Asia Private Equity Review (APER)
$1.256
$4.039
$1.219
$4.96
2006 / May
Country Feature: China, continued from page 1
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Country Feature: China, continued from page 2
previously managed a VC fund that was one of the early
investors in Alibaba and Baidu. He believes that Chinese
companies have an advantage over foreigners in China because
the Chinese market is not comfortable with many US sales and
customer support models.
According to Ho, the US model of selling software license is
not very well accepted in China. "Chinese buyers understand
paying money for a piece of equipment or a service, but they
don't understand buying a software license. That is why
StarSoftcomm's software is provided on a pay as you use
model, which better fits the Chinese commercial culture."
The Importance of Growth Equity
Jean Eric Salata, founder and CEO of Baring Private Equity
Asia, believes that the China market is elevating the category of
growth equity investing to center stage, and this will impact the
portfolios of LPs around the world. Salata stated that "growth
equity investing is very different and requires skill sets that
have traditionally been separated between teams doing early
stage and teams doing buyouts. The China market has validated
this type of investing, but teams will have to be structured right
in order to take advantage of the opportunity."
China is also capturing the attention of the UK private equity
firm 3i. Philip Yea took over the position of CEO at 3i two years
ago, and has led a concerted effort to build key aspects of their
business. According to Yea, "two years ago, 3i's growth capital
business was under-punching its weight. We have made a
concerted effort to build this part of our business, and I am
convinced that we are absolutely suited to where the China
market is today, and where it is heading. China and Asia more
generally are a very big part of what we want to do in the future."
Kathy Xu of Capital Today offers that investors need to also
recognize different dynamics within companies. "In Silicon
Valley, you see three guys working together to build a
technology company, but in China that does not work for some
reason. You need one person who is running the show.
Charisma and power are important characteristics in China, but
often hard to evaluate." The source of entrepreneurship may
also be different. "In Silicon Valley, the founder is usually the
head of technology. In China, he is the head of sales."
Dr. Shangzhi Wu of CDH Investments provides a slightly different
opinion, stating that "We do find diversified ownership, and we
believe that building balanced management is an important way
that we can help a company prepare for an IPO." According to
Wu, 80% of the growth in the CDH portfolio is organic. But, Wu
thinks private equity will change in the coming years. "We are
currently getting two to three times money in two to three years.
Now, the timeframe has to extend, and we should be looking at
how to get three to four times money in four to five years."
The growth equity market segment is so dominant in China
that it is becoming the meeting point for international and
Chinese players from all market segments. VC and traditional
growth equity firms are meeting over companies that may be
early stage, but already have positive revenues. Growth equity
and buyout players are meeting in larger deals where only
minority stakes are available. A key question for the future of
Chinese private equity is whether private equity firms will be
able to keep to deals where they can truly execute their
strategies, or whether they will be drawn too far away into
unknown waters.
Buyout Players Moving to Large Growth Investments
While Chinese private equity is booming, Chinese regulators
remain skittish about foreign control in key sectors, such as
finance and heavy manufacturing. Carlyle's troubled attempt to
take over Xugong Construction Co. is representative of some of
the regulatory challenges that still exist for doing business in
China. Speaking at the May IFC/EMPEA conference in
Washington D.C., David Rubenstein, Co-Founder and
Managing Director of Carlyle, observed that he "had never been
to as many closing dinners for one deal," but he also offered
that investors "have to be patient in China."
The Xugong deal appears to be held up by conflicting interests
at local and national governmental levels. Three other large
buyout deals that have received the most press because they
have either been blocked by the government or are in limbo
due to staled negotiations between counterparties are
Citigroup's Guangdong Development deal, Warburg's Harbin
Pharmaceutical deal and Newbridge Capital's Shenzhen
Development Bank deal. (See table on page 5.)
The challenges related to closing buyout deals in China are also
forcing players like Carlyle to focus equally, if not more so, on
the booming growth capital sector. Carlyle recently announced
the closing of a US$668 million Asia growth fund, which has
already committed over US$50 million to two Chinese firms.
continued on page 4
2003
CAPITAL RAISED FOR CHINA PRIVATE EQUITY FUNDS PER ANNUM
(US$ billions)
2004 2005
Source: Asia Private Equity Review (APER)
$0.21
$2.24
$0.31 $0.44
2006 Q1
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Despite the challenges, a buyout market does appear to be
forming. At the end of 2005, Carlyle and Prudential Financial
took a controlling 25% stake in China Pacific Life Insurance for
US$409 million. In January 2006, Pacific Alliance Group took
over Goodbaby Group for US$122 million. In May 2006, CVC
Asia Pacific paid US$623 million for a controlling stake in
Shandong Chenming Paper, one of China's biggest paper
companies, and Warburg Pincus paid US$100 million for
control of Gum, a food additive producer.
Perhaps the most significant threshold was passed in February
2006 when China-based Legend Hony Capital succeeded in
acquiring control of the Chinese glass market executed through
a vehicle called China Glass Holdings in multiple transactions.
Legend Hony reportedly controls 70% of the glass market, a
monumental achievement by a buyout firm.
The lure of the China buyout market coupled with this string of
successes is drawing interest from other international buyout
firms such as Bain Capital and KKR. How the buyout market
will fair in China is an open question, especially given US
concerns over Chinese investment in key national US assets,
but the increasing attention of major buyout players seems to
suggest a bullish market for the coming year.
Between 2004 and 2005, the buyout market in China
represented only 11% of the total value of private equity
transactions, and, like Carlyle, players more closely associated
with buyouts in other global markets have been making large
growth equity deals in China. Financial sectors are dominating
this wave of larger growth equity transactions, and key
investments in the financial sector include Temasek's US$1.5
billion investment in February 2006 in Bank of China and
Goldman Sachs' US$2.6 billion stake in the Industrial and
Commercial Bank of China.
Country Feature: China, continued from page 3
CHINA PE INVESTMENTS
BY SECTOR 2003 - 2005(US$ billions)
$0.686Manufacturing
$1.359Other
$5.034FinancialServices
$2.469IT, Telecoms& Electronics
Source: Price Waterhouse Coopers
Analysts expect that deal flow in the finance sector will migrate
from investment in the big banks to those offering more
specialized financial services such credit guarantees, credit
cards, and retail mortgages.
Trends and Challenges
In early 2005, China's State Administration of Foreign
Exchange (SAFE) made two announcements, known as SAFE
Circulars 11 and 29, which caused concern in the private
equity world. In addition to other aspects, the circulars
restricted Chinese nationals from taking shares in off-shore
entities without prior approval from SAFE, raising questions
about structures favored by most private equity fund
managers. However, this worrisome development was quickly
rectified, and private equity investors took comfort from the
collaborative process that resulted in the issuance of SAFE
Circular 75, which clarified the ruling, and clearly made
space for the private equity asset class in the Chinese
economy.
Dr. Shangzhi Wu of CDH Investments warns that private equity
is still in its early stages in China. According to Wu, "The
whole financial system is not efficient in China, and it will take
three to five years to change. Entrepreneurs still need private
equity as a source of funds, but when financial reform kicks in,
we as investors will have to adjust."
Given China's tremendous market power, Kathy Xu claims that
it is easy to find fast growing companies, but it is not so easy to
determine which companies will have sustainable growth
because "there are many copy cat companies in China, so
market share gets diluted."
For Xu, the size of the growth potential for portfolio companies
is also an enormous challenge: "A US$1 billion company can
now be built in five years, a process that used to take three
generations. How can we manage that sort of growth? The
fundamental tension is whether the building of a company's
infrastructure can keep pace with how fast the market is
growing." The key to meeting that challenge for Xu is focus
within the company's expansion plan. Xu says that "in China,
our entrepreneurs always want to do the next best thing instead
of focusing on one thing, so we make sure to have rights of veto
over expansion plans."
According to Amy Chiang of China Capital Ventures, another
challenge for private equity investors is the allegiances within a
company, as most workers have personal ties to the founder,
and perhaps less of a sense of belonging to the company itself.
Chiang says, "The cultural side of business is very different
from the US."
continued on page 5
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Country Feature: China, continued from page 4
continued on page 9
Portfolio Company Name
Guandong Development Bank
Xugong Construction Machinery Co.
Harbin Pharmaceutical Group Holdings
Shenzhen Development Bank
Lead PE Firm
Citigroup
Carlyle Group
Warburg Pincus
Newbridge Capital
Other PE Investors in the Transaction
Carlyle Group
CITIC Capital
ProposedCapital Invested
US$3,000m
US$375m
US$245m
US$170m
ProposedStake
85%
85%
45%
20%
Deal Date
Jan 2006
Oct 2005
Jan 2005
CONTROL DEALS - BLOCKED OR IN LIMBO
Status
May 2006 China Bank Regulatory Commission blocked deal on regulatory grounds. Parties considering restructuring bid.
Jun 2006 Authorities continue to withhold final approval of deal.
Apr 2006 Securities laws altered mid-auction and counterparties back out. Deal appears to be dead.
May 2006 Shenzhen Development Bank announced withdrawal from deal, legal action pending.
Portfolio Company Name
Fangtek Electronics Co.
Gum
Shandong Chenming Paper
Worksoft Creative Software Technology
Toodou.com
China Worldbest Pharmaceutical Co.
Henan Luohe Shuanghui
Oak Pacific Interactives
Bank of China
GOME Electrical Appliances Holdings
Goodbaby Group
Industrial & Commerical Bank of China
China Pacific Life Insurance Co.
Lenovo
Lead PE Firm
Qiming Venture Partners
Warburg Pincus
CVC Asia Pacific
Sequoia Capital
Granite Global Ventures
CDH Investment
Goldman Sachs
General Atlantic
Temasek
Warburg Pincus
Pacific Alliance Group
Goldman Sachs
Carlyle Group
General Atlantic
REPRESENTATIVE CHINA PE AND VC DEALS
Other PE Investors in the Transaction
DFJ ePlanet Ventures, IDG Technology, New Frontier, Kibo Technology
Jafco Asia, IDG Technology
China Resource Enterprise
CDH Investment
Doll Capital Management, Technology Crossover Ventures, Accel Partners,
Legend Capital
Prudential Financial Inc.
LLC, Texas Pacific, Newbridge Capital
Capital Invested
US$12m
US$100m
US$623m
US$30m
US$8.5m
US$341m (est.)
US$250m
US$48m
US$1,550m
US$150m
US$122.5m
US$2,580m
US$409m
US$350m
Stake
takeover
30%
25%
5%
10%
takeover
7%
25%
10%
Deal Date
Jun 2006
May 2006
May 2006
May 2006
May 2006
Apr 2006
Apr 2006
Mar 2006
Feb 2006
Feb 2006
Jan 2006
Jan 2006
Dec 2005
Mar 2005
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Vol II, Issue 2 - Q2 2006 | Page 7EMERGING MARKETS PRIVATE EQUITY
De Weese says Paul Capital is also considering offering a
dedicated emerging markets secondary vehicle, which would be
a first in the industry.
Frank Morgan, a partner at Coller Capital, says he expects
Coller “to significantly expand” its allocation to emerging
markets. They plan to devote “significant resources in line with
the increased opportunities brought about by the rising number
of primary investments in these markets.” By contrast, Coller’s
first two secondary funds bought no emerging market interests;
Funds III and IV had emerging market exposure in the single
digits.
AIG Capital Partners is another firm looking to expand activity
in what it sees as a growing market. "The center of gravity in
terms of economic growth in the coming years is likely to shift
to emerging markets," said Managing Director Scott Foushee.
"And beyond absolute growth, it would not be surprising to see
private equity investment noticeably increase from a relatively
small percentage of GDP. In this environment, liquidity will
naturally grow, and emerging markets are likely to become an
established segment of the secondaries asset class."
Some of the leading firms take an opposing view. For example,
continued on page 8
The recent growth in fundraising in emerging markets private
equity has begun to attract the attention of some secondary
investors, who buy LP interests in established private equity
funds. Firms such as Coller Capital, AIG Capital Partners,
Alpinvest, and Paul Capital all say they expect to increase the
percentage of their funds going to the acquisition of LP stakes
in emerging markets, and all are building up the expertise
needed to accurately price deals in these markets.1
This development could be a further stimulus to the rapidly
developing emerging markets private equity marketplace,
according to some industry leaders. Scott Myers, a Partner at
the investment bank Cogent Partners, noted that in certain
markets, such as mortgage financing, the development of the
secondary market was the key to exponential growth of the
primary market. "The secondary market increases transparency,
increases understanding of the assets, and raises the level of
confidence of investors that they will be able to see liquidity,"
he says.
David de Weese, a partner at Paul Capital, says he expects that
his firm's next global secondary fund, Paul Capital Partners IX,
will invest 20% of its capital in emerging markets, compared to
low single digits for the firm's 1990s funds, and 10% for the
2004 Paul Capital Partners VIII.
SECONDARY BUYERS START SHOPPING EMERGING MARKETS
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This level of interest contrasts sharply with market sentiment in
recent years. David Wilton, Portfolio Manager at the
International Finance Corporation, recalls that there was no
interest from secondary firms in 2000 when the IFC
reorganized its management of funds and looked to sell a swath
of prior commitments. "No glimmer in the eye at all," he said,
"but in the last six months there is a flame in people's eyes
because they have seen that there is a market that is coming."
Three factors help explain this turnaround. The first is an
increasing supply of capital looking for secondary purchases,
now more than US$20 billion in total, according to Myers of
Cogent Partners. Secondary funds have generated strong and
consistent returns over the last several years, which in turn
have attracted more capital, resulting in upward pressure on
pricing. Myers notes that the secondary transactions Cogent
facilitated through its investment banking business in 2005
traded at a slight premium to net asset value, whereas three
years earlier, similar quality funds would have sold for
somewhere in the 70% range.
This increase in competition is leading secondary firms to
consider new strategies, including emerging markets. As Morgan
of Coller Capital explains, "We are constantly seeking to push
the boundaries of the secondary market - in terms of asset type,
continued on page 9
Charles Grant, a partner at Lexington Partners, notes that to
date “the poor track record” of emerging markets funds has
depressed both prices of and interest in emerging markets
secondaries. “We keep hearing its going to be different this
time,” he says, “but I’m not sure.” Landmark also appears not
to have an interest at present in emerging markets, although a
representative said the firm could not comment because of
ongoing fundraising.
In Coller's case, increased attention to emerging markets has
already resulted in one historic deal: the firm's early 2006
acquisition of interests held by several Indian institutions in
India Advantage Fund-I, a US$245 million 2002 vintage-year
fund managed by ICICI Venture, a leading local private equity
player in India. With secondary transactions typically
occurring through sales of multiple funds by large US or
European institutions, this "one-off" purchase from Indian
sellers is noteworthy. It is also significant that Coller appears
to have paid a healthy premium: ICICI Venture CEO Renuka
Ramnath told India's Economic Times that the selling LPs
earned 40% IRR on the transaction.
This transaction "could help remove the impression among
Indian limited partners that private equity is a long term illiquid
product," said Ramnath.
Secondary Buyers, continued from page 7
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transaction structure and geographic location. Emerging markets
are an obvious area for us to expand."
The second factor is the growth in volume of emerging markets
private equity funds. De Weese of Paul Capital estimates that
there is US$60 billion in total net asset value across all
emerging markets private equity funds and proprietary
investment pools, a figure that has more than doubled over the
last two years on the back of rapidly increasing fundraising.
Because most LP interests are sold relatively late in the 10-
12 year lifetime of a typical fund, the jump in emerging
markets funds probably won't translate into secondary
transactions for several years, but firms such as Coller, Paul
and AIG appear to be building up capacity for that
anticipated market now.
The third factor is growing maturity of emerging markets
capital markets, which are now beginning to generate the
necessary data and the patterns of stability that secondary
buyers need in order to price transactions. Tjarko Hektor,
partner at Alpinvest and head of Alpinvest's multi-billion dollar
secondaries program, explains: "Secondary investing requires
predicting the future cashflows and ultimate exit of portfolio
companies, and to predict with confidence in emerging markets
we need to understand the patterns of the IPO market, the trade
sale markets, etc. The inflection point we are seeing is that
those markets are now becoming more predictable."
David de Weese of Paul Capital agrees. "In our previous funds,
we didn't need the capability to be forensic about pricing
emerging markets funds," he says. "We are now deploying the
resources for that more line-by-line approach."
An important question is what percentage of the US$60 billion
in emerging markets NAV will turn over in the secondaries
market. A 2003 McKinsey study calculated that 3.2% of US
funds changed hands during their lifetime, and most analysts
believe that percentage has now grown to 5% or more. In
emerging markets, however, less than 1% of funds have
changed hands, according to AIG's Foushee.
This difference can be accounted for in part by the fact that
poor performance among emerging markets funds in the late
'90s, combined with the lack of forensic pricing ability, led
secondary players to offer very steep discounts on emerging
markets funds. "The bid ask spread was pretty wide" says
Foushee.
In addition, a significant percentage of emerging market fund
investments has been held by Development Finance Institutions
(DFIs), such as the International Finance Corporation, the Asian
Development Bank, and country-specific development
Secondary Buyers, continued from page 8
Country Feature: China, continued from page 5
organizations such as The Netherlands Development Finance
Company (FMO), and the Overseas Private Investment
Corporation in the US. These DFIs typically do not encounter
the situations that often prompt mainstream LPs to sell, such as
a need for liquidity or portfolio rebalancing. DFIs also typically
play a role in developing and training emerging markets
managers, and the desire to maintain that relationship can be a
disincentive to sell.
Some secondary funds are hoping to see DFIs sell their LP
interests, and the DFIs have reportedly been receiving offers to
buy their stakes. By selling funds, "the DFIs could really help
develop the asset class and show LPs a path to liquidity," says
Foushee of AIG. Wilton of the IFC notes that the IFC is not
opposed in principle to selling fund holdings, but he believes
going prices in the market are too low to be of interest, given
the significant value of the funds in their portfolio.
Roel Messie, Director of Special Situations at FMO, notes that
his institution is being approached on a "quite regular basis."
No transactions have been completed to date, but FMO is
actively entertaining offers for funds in regions where it is no
longer active.
1 This article focuses on the purchase and sale of existing LP interests in private
equity funds. Other strategies that fall under the term secondary are not covered
here, such as the direct purchase of portfolio companies by secondary buyers.
Pat Dinneen of Siguler Guff believes that China is already
changing the fundamental assumptions that most private equity
investors hold. For Dinneen, "Early stage investing has already
been redefined in China, because young companies quickly get
revenue and profits making growth capital style investing
possible at an earlier stage."
The China market is having an impact on the private equity
world. Some of the western world's leading fund managers are
transforming their organizations, re-evaluating their posture
towards market segments, and rushing to build relationships
with new generations of Chinese talent. Meanwhile, a band of
newly independent Chinese private equity professionals are
leading the way in key areas, perhaps altering the makeup of
what LPs will consider the global top quartile, or conversely
taking investment capital into new rough territory, and giving
LPs exposure to new levels of risk. Whether future returns from
China have a positive or negative effect on global LP returns,
what is clear is that China is increasingly a part of the global LP
investment profile.
1 All data is from the Asia Private Equity Review (APER) unless otherwise noted.2 China Statistics Bureau, China Development and Reform Commission, SME
division.
EMERGING MARKETS PRIVATE EQUITY ASSOCIATION
1055 Thomas Jefferson St. NW, Suite 240, Washington DC 20007 tel: +1 202.449.1155 web: www.empea.net
Vol II, Issue 2 - Q2 2006 | Page 10EMERGING MARKETS PRIVATE EQUITY
The latest data from Cambridge Associates’ Emerging Markets
Private Equity Index (see Table 1), shared with EMPEA as part
of a collaboration agreement, shows that emerging markets
private equity returns remain robust. The December 31, 2005
data reveals strong 1- and 3-year returns across all regions, with
Central & Eastern Europe and Russia leading the way.
As shown in Chart 1, median returns have continued to improve
year-on-year over the past three years. The Chart shows the
upward trend for 1-, 3-, and 5-year returns as of year end 2003,
2004 and 2005.
While median returns from emerging markets were poor on
average for most 1990s vintage years, newly released data
shows that top quartile returns from some of these vintage years
beat the median return for US buyout during those same years.
Chart 2 compares the breakpoint for top quartile emerging
market funds versus median returns for US buyout funds, by
vintage year. As the graph illustrates, for many of the years for
which the Cambridge database has sufficient data, an LP would
have done as well or better with a top quartile emerging
markets fund as with a median US buyout fund.
1 Cambridge Associates LLC Proprietary Index; pooled end to end returns, net of
fees, expenses and carried interest.
Sources: Cambridge Associates LLC U.S. Venture Capital Index®, Cambridge
Associates LLC Private Equity Index®, Cambridge, Associates LLC Proprietary
Database, Standard & Poor's, and Morgan Stanley Capital International.
MSCI data provided “as is” without any express or implied warranties.
25
20
15
10
5
0
-55 Year 3 Year 1 Year
Dec-05
IMPROVEMENT IN EMERGING MARKETSVC & PE INDEX, DEC 2003 TO DEC 2005
%
Dec-04
Dec-03
Return Horizon
Chart 1
18
16
14
12
10
8
6
4
2
01996 1997 1998
US PE Median
TOP QUARTILE EMERGINGMARKETS COMPARED WITH MEDIAN
US & WESTERN EUROPE
%
1999 2000
EMPE Top Quartile Break Point
Year
Chart 2
THE EM PRIVATE EQUITY BENCHMARK CONTINUES ITS ASCENT
Dec 31, 2005 Data
EM VC & PE Index
Asian PE Index
CEE Russia PE Index
Lat Am PE Index
US PE Index
US VC Index
W. Eur PE Index
MSCI EM Index
S&P 500
CAMBRIDGE ASSOCIATES EMERGING
MARKETS PE INDEX1
1 Yr
21.87
13.78
50.26
14.71
27.35
7.90
24.70
34.54
4.91
3 Yr
19.24
16.47
30.58
10.95
24.93
7.30
28.42
38.35
14.40
5 Yr
4.95
5.06
15.34
-6.81
10.07
-9.89
19.91
19.44
0.54
10 Yr
4.06
3.67
10.25
-3.62
13.37
39.34
21.13
6.98
9.07
Table 1
EMPEA is Recruiting a Director of Research
EMPEA is looking for a Director of Research to manage its research initiatives. Reporting directly to the Executive Director, s/he will develop a work program that establishes the priorities, outputs and research budget for the organization; work with the ED to develop negotiated agreements with 3rd party service providers to execute research on EMPEA's behalf and manage those relationships; and develop, manage and implement EMPEA's own research efforts, including semi-annual fundraising, investment and exit data for the asset class.
The ideal candidate will have at least 3-5 years of solid work experience (more work experience will be viewed favorably), preferably in research related to private equity or international finance/business. S/he must be a highly motivated self-starter, with the ability to excel in an entrepreneurial environment and mobilize creative solutions for a start-up organization.
Compensation is competitive with non-profit organizations and commensurate with experience. Further details on how to apply are available from EMPEA's website: www.empea.net.
EMERGING MARKETS PRIVATE EQUITY ASSOCIATION
1055 Thomas Jefferson St. NW, Suite 240, Washington DC 20007 tel: +1 202.449.1155 web: www.empea.net
larger fund, with US$10 million in fees per annum (US$50
million in fees over five years), is not being correctly
incentivised to deliver what the LP needs.
Within CDC's own portfolio, we are currently paying US$52
million per year in management fees to large funds compared to
US$12.7 million for smaller funds. As an LP investor devoted
to building a sound reputation for private equity in new
markets, it deeply concerns me to find a situation in which a
manager may be living in great luxury, driving an excessively
expensive car, and renting vast luxurious office space, yet
failing to deliver a single dollar to his investor. This scenario
has the potential to undermine the integrity of our industry and
can sow the seeds of a public backlash against private equity,
particularly in emerging markets, that would be damaging for
all of those who are profiting responsibly from it. For larger
funds, I believe there is merit in a declining fee from 2% to 1%,
or a fee based on a particular proposed cost structure.
Smaller funds face the opposite challenge in that a 2%
management fee is often too constraining for a fund to carry out
continued on page 12
As LPs pour billions of dollars into the private equity asset
class, I am concerned that the industry is blindly following a set
of metrics that is creating a fundamental misalignment of
interests. In large funds, outsized management fees damage our
asset class by creating an image of excess and sowing the seeds
of lethargy that I fear will come back to us in ten years' time in
the form of reduced returns from poorly incentivised teams. On
the other hand, there is a considerable bias against smaller
funds because management fees may simply not be sufficient to
launch a true private equity programme, and the industry is
thereby stifling innovation in an asset class that prides itself as
being cutting edge. As CEO of one of the largest investors in
private equity funds in emerging markets, I believe that LPs and
GPs alike must be true custodians of this important asset class
of private equity, and reform some of our core incentives.
The problem begins with the industry's blind devotion to the 2%
management fee. If the standard 2% is uniformly applied both
to a large fund of US$500 million, requiring a team of some
fifteen to twenty people, and a small fund of US$25 million,
requiring some six to ten people, a potentially unhelpful
situation is created. One could argue that the manager of the
Vol II, Issue 2 - Q2 2006 | Page 11EMERGING MARKETS PRIVATE EQUITY
GUEST ARTICLE: FEE STRUCTURES MUST BE REFORMED FOR BETTER ALIGNMENT OF PE INCENTIVESBy Richard Laing, Chief Executive Officer, CDC
EMERGING MARKETS PRIVATE EQUITY ASSOCIATION
1055 Thomas Jefferson St. NW, Suite 240, Washington DC 20007 tel: +1 202.449.1155 web: www.empea.net
Vol II, Issue 2 - Q2 2006 | Page 12EMERGING MARKETS PRIVATE EQUITY
Guest Article: Fee Structures, continued from page 11
its mission. This is especially concerning for an industry that is
dependent on innovation and creativity. A recent example of a
smaller fund gave me cause for concern. This first-time fund,
with talented people operating in a particularly tough
investment environment, underperformed because the team
lacked sufficient resources to monitor its investments to the
degree it wanted. With the benefit of hindsight, perhaps a
higher management fee would have helped that team,
positioning it better to raise a follow-on fund and deepening the
private equity asset class in this important market.
Since smaller funds are often first-time players, the industry
norms are actually creating a disincentive for the development
of new teams. I believe the industry should consider higher
management fees of up to 3% for smaller funds as well as lower
hurdle rates to ensure that smaller fund managers are
incentivised to reach for a carried interest. These more
favourable incentives for the GP should perhaps be offset by a
lower carry, possibly in the range of 10%. This structure would
help new funds get off the ground, and even though their
overall upside potential might be capped in the short term, they
would have the opportunity to demonstrate a track record and
position themselves for follow-on activity.
Similarly, the usual ten-year life of a fund should be flexible.
Where lack of liquidity for exits is a feature of the economy in
question, a longer fund life may be considered. In markets
where the opportunity is more quickly realized, GPs would do
well to propose shorter fund life periods. In India, CDC
recently had a sensible proposition for a fund life of five years
with a two-year extension for a PIPE fund, where there is high
liquidity and the investment thesis was short term. CDC would
like to see more of this kind of tailored approach. It
demonstrates quality of thinking on the part of the GP and
encourages LP confidence that the same creative skills will be
applied to the investments within the fund itself.
I believe reform of private equity incentives is crucial, but the
industry must also remain aware of the difficulties GPs face in
raising funds and securing a range of investors. Every GP has
experienced the challenges of corralling a number of investors
with different approaches around a single set of terms. That is
why the responsibility for finding more tailored incentive
packages lies with LPs and GPs alike.
What is the cost of not pursuing change? We risk creating more
and more damaging examples of excess, and at the same time
excluding more and more capable new players from entering
this exciting industry. As private equity is booming in Asia,
Eastern Europe, and South Africa, and is spreading steadily in
sub-Saharan Africa, Latin America and South Asia, I believe
our industry is at the forefront of globalization, and we must
take care to appropriately represent the positive power of
private sector investment. I am completely supportive of
successful GPs generating wealth for themselves when they are
delivering returns for their investors, but it is essential that the
public and private interests involved in the money fuelling
global economic growth are properly guarded.
Richard Laing is the Chief Executive Officer of CDC, the UK Government-owned development finance institution and one of the larger LPs in emerging markets private equity, with a portfolio of $1.6 billion. CDC's mission is to generate wealth, broadly shared, in emerging markets, particularly the poorest countries, by providing capital for investment in sustainable and responsibly managed private sector businesses.
EMERGING MARKETS PRIVATE EQUITY ASSOCIATION
1055 Thomas Jefferson St. NW, Suite 240, Washington DC 20007 tel: +1 202.449.1155 web: www.empea.net
EMERGING MARKETS PRIVATE EQUITY
GLOBAL PRIVATE EQUITY CONFERENCE SELLS OUT AT 600
The IFC 8th Annual Global Private Equity Conference held in association with EMPEA on May 11-12, 2006 in Washington, DC,
attracted 600 emerging markets private equity professionals for two full days of substantive content, intensive discussions, and almost
constant networking.
Co-Founder & Managing Director of The Carlyle Group David Rubenstein gave the audience an overview of the history of emerging markets private equity and an idea of which countries will follow in the footsteps of the BRIC regions.
EMPEA's Executive Director, Sarah Alexander, discusses the conference with sponsors George Siguler and Drew Guff of Siguler Guff.
IFC’s Private Equity and Investment Funds Director, Haydee Celaya, and Director of Corporate Governance, Teresa Barger, meet up with Claudia Koch of Ethos Technology.
Breakout sessions on regions and key issues were led by industry experts, including Sandeep Reddy of iLabs and Renuka Ramnath of ICICI Venture Funds. Topics included the major regions of the world, small and medium enterprises, clean technology, media, and hedge funds.
Vol II, Issue 2 - Q2 2006 | Page 13
EMERGING MARKETS PRIVATE EQUITY ASSOCIATION
1055 Thomas Jefferson St. NW, Suite 240, Washington DC 20007 tel: +1 202.449.1155 web: www.empea.net
Vol II, Issue 2 - Q2 2006 | Page 14EMERGING MARKETS PRIVATE EQUITY
EMERGING MARKETS PRIVATE EQUITY EXITS & IPOS
This list represents a sample of exits announced in Q2 2006. This list is not meant to be exhaustive, but rather indicative of the exit
trends in emerging markets private equity. Information is compiled from submissions to EMPEA and from a range of publicly
available news sources. We encourage all fund managers to submit information about their exits to EMPEA on a regular basis for
possible inclusion in the newsletter. Please send information to [email protected].
COUNTRY
Brazil
Brazil
China
China
China
China
India
India
India
Macedonia
Moldova
Romania
South Africa
South Africa
South Korea
Thailand
Thailand
PORTFOLIO COMPANY NAME
Grupo Abril
Lupatech S.A.
Bank of China
China Gren Tech (formerly known as Powercom)
China Paradise Electronics Retail Ltd
GST Holdings Ltd.
AirDeccan
Progeon
Sharekhan
On.Net
Commercial Bank "Moldova-Agroindbank" S.A.
Monopoly Media
Dunlop Tyres International
Reclamation Group Limited
Korea Exchange Bank
Central Plaza Hotel Plc.
Distri-Thai Ltd
DATE OF INVESTMENT
Jul-04
2003, 2004
Dec-05
Dec-03
2005
Dec-04
Mar-05
Apr-02
Oct-00
Sep-00
Jun-05
Apr-05
Mar-98
Apr-00
N/A
N/A
Dec-01
CAPITALINVESTED
US$70.7m
US$23m
US$74m
US$12m
US$60m
US$20.5m
US$55m
US$20m
US$10.6m
US$0.4m
US$1.6m
N/A
N/A
N/A
N/A
N/A
US$4.4m
DATE OF EXIT
May-06
May-06
Jun-06
Mar-06
May-06
Apr-06
May-06
May-06
May-06
Mar-06
Mar-06
Apr-06
Apr-06
Feb-06
TBA
May-06
Mar-06
TYPE OF EXIT
Trade sale to South African media group Naspers for US$86 million
IPO on Bovespa; neither firm divesting at IPO
Partial Exit: IPO on HKSE; share price rose 20% above offer price in first week after listing
Partial Exit: IPO on NASDAQ
Partial Exit: MS will sell 10% of holdings
Partial Exit: 3i took GSST public on the HKSE in June 2005, but made no divestment. In April, received US$18.7 million in return for selling half of its shares
IPO on BSE; undersubscribed, share offering price reduced. Neither firm divesting at IPO
Trade sale to Infosys of all holdings for US$115 million
Secondary sale of Carlyle's stake to General Atlantic; other private equity investors did not divest
Trade sale of SAEF's 59.4% ownership to Slovenain Telecom for US$2.4 million
Open auction to foreign financial investors on the Moldova Stock Exchange
Trade sale to media company in Romania
Trade sale by Ethos-led consortium to Apollo Tyres of India
Management buy-out of Brait II holdings; funded through a Eurobond issuance
Trade sale to Kookim Bank of Lone Star's 51% equity stake. The two groups have signed an agreement with a sale price of US$6 billion, but deal is still pending approval of Financial Supervisory Committee
Secondary sale of 16.2 million shares to Lombard's Thailand Equity Fund for US$15 million
Secondary sale of its entire stake for US$12.5 million to Actis
RETURN
N/A
N/A
N/A
4.35x; 92%IRR ($US)
N/A
N/A
N/A
5.7x
N/A
6.4x; 43% IRR
3.7x; 33.6% gross
IRR
1.63x; 63% IRR
N/A
N/A1.76x book value;
20% premium over market price;
N/A
3.41x; 36% IRR
PRIVATE EQUITY FIRMS
Capital International
Natexis Mercosul Fund, GP Investimentos
Asian Development Bank
Actis
Morgan Stanley Private Equity
3i PLC
ICICI Ventures Funds Management & Capital International
Citigroup Venture Capital International (CVCI)
Carlyle Group
Small Enterprise Assistance Funds
Horizon Capital Advisors LLC
Scimitar Global Ventures
Ethos Private Equity
Brait Private Equity
Lone Star
International Finance Corporation (IFC)
Navis Capital Partners
OTHER PE INVESTORS
N/A
BNDES, CRP
Oaktree Capital Management, LLC,
Och-Ziff Capital Management,
Temasek
Standard Chartered Private Equity, JAFCO Asia
Technology Fund
CDH China Fund
N/A
N/A
N/A
General Atlantic LLC; HSBC Private Equity India Fund,
Intel Capital
N/A
EBRD
N/A
Franklin, Ellerine Brothers, Frangos
N/A
N/A
Lombard Investments
Actis
EMERGING MARKETS PRIVATE EQUITY ASSOCIATION
1055 Thomas Jefferson St. NW, Suite 240, Washington DC 20007 tel: +1 202.449.1155 web: www.empea.net
Vol II, Issue 2 - Q2 2006 | Page 15EMERGING MARKETS PRIVATE EQUITY
Abraaj Capital of Dubai and BMA Capital of Pakistan are co-sponsoring a $300 million private equity buyout fund in Pakistan. The fund looks to fully close by September 2006, with targeted internal rate of return of 30%. http://www.abraaj.com/
Actis will invest US$9.6 million in India based Phoenix Lamps Ltd via its Actis India Fund 1 LP and Actis Asia Fund 2 LP, giving them a 14% equity stake investment in the firm. http://www.act.is
AIG Capital has acquired a 30% share of the Frigorifico Mercosul meat packing plant for $21.5 million. This is AIG's second investment in Brazil's agricultural sector. http://www.aiggig.com/
CB Richard Ellis, a Los Angeles-headquartered commercial real estate firm, has acquired a 51% stake in Noble Gibbons, a Russian real estate services firm, from Alfa Capital Partners, a Moscow-based private equity and real estate investment firm. No financial terms were disclosed. http://www.alfacp.ru/eng/
The Wall Street Journal reports that The Carlyle Group has agreed to pay about US$1.3B for the majority stake in Taiwan's Eastern Multimedia Co., one of the country's largest cable television operators. Carlyle has reportedly outbid Newbridge Capital and Liberty Global private equity groups in the deal. http://www.thecarlylegroup.com/
ChrysCapital has exited from Gammon India, a construction company by selling its entire stake in the company at around US$95M in the secondary market. Chrys Capital received 4.75 times its original US$20M investment from 15 months ago. http://www.chryscapital.com
Evolvence Capital of Dubai has announced its $150 million Evolvence India Life Sciences Fund, which will invest in pharmaceutical, biotech, research and drug manufacturing companies in India. The firm named Hari Buggana as the fund's managing director. http://www.evolvence.com/
IDFC Private Equity, a Mumbai-based investment management firm, has raised US$430M for its second fund. IDFC Private Equity Fund II focuses on Indian infrastructure. The firm's portfolio includes GMR Energy, Chalet Hotels and Dehli International Airport. http://www.idfc.com/
Vietnam-based Mekong Capital closed its second private equity fund, the Mekong Enterprise Fund II, with capital commitments of $50 million. http://www.mekongcapital.com/
Paul Capital Partners' Royalty Fund, a leading international healthcare fund, has signed a US$27M deal with the U.S. subsidiary of India's Glenmark Pharmaceuticals Ltd. In return for their financing of the development of 16 dermatological products by Glenmark for the U.S. market, Paul Capital will receive an undisclosed royalty on the net sales of these products, which currently have a total market value of about US$1bn. http://www.paulcapital.com/
SHUAA Partners announced the initiation of its second private equity fund - the Frontier Opportunities Fund I LP targeted to be $100 million to invest in Syria, Lebanon and Jordan. http://www.shuaapartners.com/
Siguler Guff, an investment advisory and fund of funds manager based in New York, has closed its US$600M BRIC Opportunities Fund LP. The new fund of funds will invest in local private equity GPs, as well as make direct co-investments in Brazil, Russia, India and China. The fund's original target size was around US$350M and had to be increased to accommodate strong investor demand. http://www.sigulerguff.com/
MEMBER NEWS – Q2 2006
Emerging Markets Private Equity Association
What is EMPEA… EMPEA is a broad-based membership organization formed to serve private equity and venture capital firms and institutional investors in the emerging markets of Asia, Eastern Europe, Africa, Latin America and the Middle East.
EMPEA’s Core Beliefs are… Private equity investing can be a critical driver of economic growth and opportunity in emerging markets and can generate strong returns for investors. Despite significant differences across emerging market regions, private equity firms face important common challenges and opportunities.
EMPEA’s Mission is… To help strengthen the performance of private equity investing in emerging markets by assisting private equity firms and other stakeholders address industry challenges that are pan-emerging-market in nature.
EMPEA’s Vision is… EMPEA implements targeted programs, in coordination with national and regional venture capital associations, that help improve private equity returns and increase investment flows.
To become a member of EMPEA, please visit our website at: www.empea.netOr call EMPEA at +1 202.449.1155
EMERGING MARKETS PRIVATE EQUITY ASSOCIATION
1055 Thomas Jefferson St. NW, Suite 240, Washington DC 20007 tel: +1 202.449.1155 web: www.empea.net
Q4 2006 continued
Asian M&A ForumMid - October, Shanghai, Chinawww.asianfn.com Asian Business Dialogue on Corporate Governance 2006October 26, Beijing, Chinawww.acga-asia.org The Asian Private Equity Investors Conference (co-hosted by SVCA & PEI)October 30, Singaporewww.privateequityinternational.com 6th AVCA ConferenceNovember 5 - 8, Dakar, Senegalwww.avcanet.com Asian Venture Forum's 19th Annual ConferenceNovember 8 - 10, Hong Kongwww.asianfn.com PE Analyst Limited Partners Summit WestNovember 15 - 16, San Francisco, CAevents.dowjones.com PE Limited Partners Europe Conference November 28 - 29, Savoy, Londonevents.dowjones.com Emerging Markets Forum 2006(co-hosted by EMPEA & PEI)November 30 - December 1, Londonwww.privateequityinternational.com AVF - IndiaDecember 4 - 6, Mumbai, Indiawww.asianfn.com Asian Ventures 2006December 5 - 6, San Jose, CAevents.dowjones.com
Vol II, Issue 2 - Q2 2006 | Page 16EMERGING MARKETS PRIVATE EQUITY
David BaylisNorton Rose
Michael BleyzerSigmaBleyzer
Christopher Brotchie Baring Asia, India &Vostok Funds(Sr. Advisor)
Michael Calvey Baring Vostok Capital Partners
Patricia ClohertyDelta Private Equity Partners
Yasser El MallawanyEFG-Hermes Private Equity
Cynthia HostetlerOPIC
Richard LaingCDC Group plc
Roger Leeds, ChairmanJohns Hopkins UniversitySAIS
H. Jeffrey LeonardGlobal Environment Fund
Donald RothEMP Global
André RouxEthos Private Equity Ltd.
George SigulerSiguler Guff & Company, LLC
Pote VidetPrivate Equity (Thailand) Co.,Subsidiary of Lombard
Andrew WilliamsSVG Advisers Limited
Teresa BargerInternational Finance Corp
Thomas BarryZephyr Management, L.P.
Michael BarthDarby Overseas Investments
Antonio BonchristianoGP Investimentos
Woodrow CampbellDebevoise & Plimpton
Ashish DhawanChrysCapital
Paul FletcherActis
Mark JenningsAfrican Venture CapitalAssociation
EMERGING MARKETS PRIVATEEQUITY ASSOCIATION
BOARD OF DIRECTORS
BOARD OF ADVISORS
Josh LernerHarvard Business School
Dennis LockhartChairman, SEAF
Thomas ‘Mack’ McLartyKissinger McLarty Associates
Luis MirandaIDFC Private Equity
David RubensteinThe Carlyle Group
Everett SantosFounder, LAVCA
James Seymour, ChairmanCommonfund Capital
Robert StillmanMilbridge Capital Management, LLC
Paul TierneyChairman, Technoserve
EMPEA’s Board of Directors and Board of Advisors would like to
express sincere gratitude to the Charter Members who have
joined EMPEA, thereby providing the necessary resources to
support the growth of this organization.
NEW CHARTER MEMBERSApril 1 - June 12, 2006
UPCOMING EVENTS OF INTERESTEMERGING MARKETS PRIVATE EQUITY 2006
IEP Capital, LLCOmidyar Network
JOIN EMPEA AS A CHARTER MEMBER!To learn more: [email protected] or +1 202.449.1155
For a complete list of EMPEA's Members, visitwww.empea.net
Q3 2006
European Private Equity COOs & CFOs ForumJuly 5 - 6, London, UKwww.privateequityinternational.com The 2006 Private Equity Strategic Financial Management ConferenceJuly 18 - 19, New York, NYwww.privateequityinternational.com First Annual Master Class on Deals in IndiaJuly 27, New York, NYwww.capitalroundtable.com Private Equity Forum China 2006August 31 - September 1, Shanghai, Chinawww.iqpc.com.cn Private Equity World Middle East 2006September 19 - 21, Dubai, UAEwww.altassets.com 13th Annual PE Analyst ConferenceSeptember 26 - 27, New York, NYpeaconference.dowjones.com Q4 2006 Venture Capital Investing in IndiaOctober 10, San Francisco, CAwww.ibfconferences.com EVCA Venture Capital ForumOctober 11 - 13, Barcelona, Spainwww.evca.com LAVCA LP/GP RoundtableOctober 12, Washington, DCwww.lavca.org
Note: The challenges inherent in gathering data for private equity may result in discrepancies. EMPEA strives to gather and report data that is respected in the industry and to the greatest extent possible based upon the best of available research, whether our own or from a reliable third party.