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EMPEA: Emerging market investments hit record levels in 2018

Private capital fundraising and investment in emerging markets reached record levels in 2018, according to an industry statistics report released Wednesday by EMPEA.

Global investor interest in emerging Asia accounted for much of the increase, while private capital opportunities in Latin America and Africa improved, the emerging markets private equity association found.

Overall, private capital vehicles in all emerging markets raised $90 billion and invested a disclosed $70 billion. That represents year-over-year increases of 39% and 27%, respectively.

Nearly half of the $70 billion in investments were in consumer discretionary, consumer staples and health-care sectors.

Of the $90 billion raised worldwide, China accounted for a record $35 billion, driven by investor interest in Chinese technology-enabled, consumer-oriented businesses, EMPEA said. Capital raised increased 92% for Latin America and 22% for Africa.

Investment themes attracting capital across emerging markets include early and growth-stage investments in consumer and health-care sectors; infrastructure; control investments through primary and secondary buyouts; and private lending to support growth and restructuring.

Jeff Schlapinski, EMPEA senior director of research, said in a statement that the breadth of private strategies in emerging markets "points to an evolving and maturing landscape" after protracted periods of economic volatility and political uncertainty, with investors finding "new ways to put capital to work across the capital structure and across asset types."

*Central and Eastern Europe, Commonwealth of Independent States (10 post-Soviet republics)