Emerging from economic infancy requires a series of economic reforms, foreign direct investment, and other public-sector levers that offer greater access to capital for developing markets.
But the private sector, while it is often overlooked, plays an increasingly crucial role in driving the economic development of a country.
This is especially true in markets where the regulatory infrastructure either dissuades (or forbids, in the case of sanctions) investors from investing through more traditional channels of growth. For markets without the legal or regulatory barriers, private equity investing can play a major role in stimulating growth and consequently contributing to the development of an emerging economy.
Of course, the practice of private sector investing in emerging markets is certainly not a new craft, but the investment landscape is changing.
As Dr. Roger Leeds writes in his latest book, Private Equity Investing in Emerging Markets, in the West, private companies are much larger, there is much less fragmentation, and there tends to be a deeper pool of managerial talent. These components contribute to a robust economy in the Western world and are often lacking in developing regions, sometimes deterring private equity investors from capturing the potential opportunity for investment.
Additionally, from a private equity (PE) perspective, success lies in building value for long-term performance, and there are significant obstacles for creating such value within the private sector in emerging markets. Dr. Leeds points out, however, that these obstacles are actually creating white spaces for PE investors, and his thesis outlines the opportunity for continued investment for PE firms.
Listen in as FSG’s CEO Richard Leggett sits down with Dr. Leeds to discuss the opportunities and challenges of private equity investing in emerging markets and what investors should be considering when evaluating investment opportunities.
Roger Leeds is a Professor at the Johns Hopkins School of Advanced International Studies (SAIS). He was founding Chairman of the Emerging Markets Private Equity Association and serves on the board of directors. Previously, he was an international finance practitioner for 25 years and held positions with a Wall Street investment bank, the International Finance Corporation, and a private equity firm. He has served on numerous boards, been published widely in his field, and is a member of the Council of Foreign Relations. He received his undergraduate degree from Columbia University and his PhD from Johns Hopkins University. Private Equity Investing in Emerging Markets is available for sale by Palgrave MacMillan and on Amazon.com here.