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Private Equity Investor Appetite for the BRIC Region – September 2014

by Katie Edwards

  • 30 Sep 2014
  • PE

BRIC is known to be one of the fastest growing regions in the world, attracting private equity investors on a global basis. BRIC countries have experienced political and social changes which have both helped and hampered the development of their respected economies, with Brazil, Russia, India and China still offering an abundance of investment opportunities. 

Preqin’s Investor Intelligence currently tracks 257 BRIC-based LPs investing in private equity, representing 4.8% of all active investors in the asset class. China has the largest proportion of LPs based within the BRIC region at 54%, followed by India (24%), Brazil (20%) and lastly Russia (2%). Government agencies and corporate investors account for the largest proportion (31%) of BRIC-based LPs, followed by investment companies and private sector pension funds, which each represent 10% of the BRIC-based investor population. 

The BRIC region is continuing to provide attractive investment opportunities for investors based in other regions around the world. Preqin currently tracks 1,307 LPs that have previously committed to private equity vehicles with a focus on the BRIC region. Furthermore, Preqin Investor Outlook: Alternative Assets, H2 2014 reveals that many LPs consider the BRIC countries to be presenting beneficial investment opportunities within emerging markets. China was named as an attractive investment destination by 23% of investors surveyed, followed by Brazil which was named by 15% of LPs. In comparison to last year, the report shows that there has been a one percentage point increase to 13% in the proportion of investors naming India as presenting the best investment opportunities. Finally, only 6% of investors consider Russia as an attractive geography for their private equity investments, a significantly lower proportion than that of the other BRIC countries. 

LPs with the largest total assets under management from each of the BRIC countries include China Investment Corporation, Banco do Brasil, Vnesheconombank and State Bank of India. European Bank for Reconstruction and Development is an example of an investor that has recently committed to a BRIC-focused fund. The $51.2bn bank has committed $75mn to Russia Partners IV, a growth vehicle focused on providing growth and expansion capital for businesses in Russia. Boxin China Growth Fund I is a growth vehicle targeting businesses located exclusively in China. The fund is still in market, with a target of $200mn. It held a first close at $54mn, and includes private equity firm Vertex Venture Holdings as an investor. 

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