- CNTV English - CCTV News

Homepage > News > Biz >

IFC sees upswing for private equity in emerging markets

05-12-2010 08:47 BJT

WASHINGTON, May 11 (Xinhua) -- IFC, a member of the World Bank Group, forecast Tuesday a brighter outlook for private equity investment in emerging markets as economic growth picked up.

It said the pick-up provided investors an opportunity to achieve strong returns as they helped create jobs and improve living standards.

IFC Executive Vice President and CEO Lars Thunell said the developing world’s faster growth and lower debt burden made it less vulnerable to cyclical downturns and a more attractive destination for private equity.

"It is the early stages of a recovery that are the most promising times to invest for private equity,” Thunell said at IFC’s 12th annual Global Private Equity Conference, held here in association with the Emerging Markets Private Equity Association (EMPEA).

The performance of IFC's 2.6 billion dollar private equity portfolio has been impressive. Between 2000 and the end of 2009, IFC's private equity funds had an internal rate of return of around 18 percent.

"Private equity in developing countries is based on growth, not leverage," Thunell said. "It is not as risky as people think."

Investors haven't been the only beneficiaries. Companies in IFC's private equity portfolio have employed almost 300,000 people since 2000.

Job creation at those companies, two-thirds of which are small and medium enterprises, far exceeds regional averages. That development impact is behind IFC's decision to boost its equity investments.

In response to the financial crisis, IFC scaled up its target for private equity fund investments from 400 million dollars to 900 million dollars this fiscal year.

The effort has mobilized capital in some of the world's poorest countries, including Cameroon, Malawi, Sierra Leone, and Bangladesh.

Haydee Celaya, IFC Director, Private Equity and Investment Funds, said domestic growth rates drove returns on private equity investments in emerging markets. Nearly two-thirds of companies in which IFC-backed funds had invested were focused on domestic or regional growth opportunities.

"We are committed to emerging market private equity and want to see a broader investor base," she said.

IFC is a leading private equity investor in emerging markets, with a portfolio that includes more than 160 funds. About one-fifth of its commitments are in Africa, where IFC's equity investments have averaged annual returns of around 20 percent.

Editor:Zhang Jingya |Source: Xinhua

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program