BRIC-Based Private Equity Investors and Investor Appetite for the Region – October 2013

by Katie Edwards

  • 08 Oct 2013
  • PE

As the world looks to recover from the current financial crisis, the BRIC countries have continued to develop their economies, attracting private equity investors around the globe. BRIC is known as one of the fastest growing regions in the world, with the constituent countries of Brazil, Russia, India and China unlocking their potential as economic powerhouses and offering a wealth of investment possibilities.

Preqin’s Investor Intelligence currently tracks 233 BRIC-based LPs investing in the private equity asset class, representing 4.5% of all active investors in private equity. China hosts the largest proportion of investors within the BRIC region (55%), followed by India (24%), Brazil (18%), and lastly Russia (3%).

The BRIC region is continuing to provide strong investment opportunities for LPs based in other regions around the world. Preqin’s Investor Intelligence currently tracks 1,230 LPs that have previously made fund commitments to private equity vehicles focusing on the BRIC region. In addition, Preqin’s Investor Outlook: Alternative Assets, H2 2013 report reveals that many LPs consider the BRIC countries to be currently presenting favourable investment opportunities within emerging markets. The percentage of investors naming both China and Brazil as presenting the most favourable investment opportunities is an equivalent of 26%, followed by India which was named specifically by 12% of respondents. Finally, 7% of investors consider Russia as a favourable destination for private equity investments.

Some of the largest LPs located within the BRIC countries include China Investment Corporation, PETROS and National Social Security Fund – China. An example of LPs to have recently committed to funds focusing on the BRIC region include the US government agency International Corporate Finance, which has committed $25mn to India 2020 Fund II, a growth vehicle focused on providing growth capital to small and medium-sized enterprises in India. Siguler Guff BRIC Opportunities Fund III is a fund of funds vehicle also targeting funds in Brazil, Russia, India and China. This fund is in the market raising capital currently with a target of $500mn, and has already attracted US-based investors such as Carpenters Pension Trust Fund of St Louis, a private sector pension fund. 

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