Ep. 9: The State of EM Private Markets



One of the questions I’ve often pondered since founding this business is: is emerging markets private equity dying? 

That literally was the name of the first study I published when I launched the company in 2016, and I — perhaps naively — thought that drawing attention to some of the industry’s problems might catalyze people to action.

To put some figures on it, between 2010 and 2015, the number of growth equity funds achieving a close had declined by more than 30%, and fund vehicles greater than or equal to $1 billion in size grew from 40% to 60% of all capital raised. 

So capital was consolidating in fewer, larger managers — mostly in Asia — while at the same time the number of first-time funds holding a final close had been declining by 10% each year. And the development finance institutions were exacerbating the trends, committing to more Funds IV+ than to Funds I, II, or III.

Did things change? 

Suffice it to say that last October I put out a newsletter that reframed the question to: is EM PE dead?

So, I wanted to bring on someone who could speak to the state of EM private markets. 

That guest is Greg Bowes, Co-Founder and Managing Principal of Albright Capital — a global investment firm with expertise in special situations, infrastructure, infrastructure services, and real assets.

The label ‘variant perception’ gets bandied about quite a lot, mostly as nonsense. But Greg has a different view on EM private markets than most of the managers I’ve met, and I thought he’d be a great guide to walk through where the industry is in the summer of 2021.

In today’s conversation, Greg and I discuss:

  • Should investors even be investing in EM private markets?
  • The impact of currency depreciations on performance and whether investors should hedge.
  • The shortcomings of the traditional approach to EM private equity and whether it magnifies the impacts of adverse cross-currency movements.
  • The problem of herd behavior.
  • The importance of sound deal structuring in EMs.
  • And much more.

I’ve included some additional readings in the show notes, so dive in if you’re keen to learn more. 

I hope you enjoy the conversation.

This podcast was recorded in June 2021.


Learn more about Albright Capital at https://www.albrightcapital.com.


Portico Advisers resources referenced in this episode include:


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