Looking through a Hazy Crystal Ball

Abstract

Yogi Berra, the New York Yankee baseball player renowned for his famous quips, is alleged to have pronounced with his characteristic wisdom, “It’s very difficult to make predictions, especially about the future.” If forecasting future trends is generally a fool’s errand, as Berra suggested, emerging markets private equity poses especially precarious challenges due to its relatively brief history and limited data. Compounding the dangers are the obvious difficulties of generalizing about what may or may not come to pass in more than 150 countries, each with its own history, culture, demographics, and capabilities. Nevertheless, one prediction can be made with reasonable confidence: just as the asset class is unrecognizable today from its embryonic beginnings about 20 years ago, it is likely to bear little resemblance a decade from now to its present profile.

Ours is more or less a cottage industry, and the jury is still out on how rapidly it will transition to something more durable and mature. But there are clear signs of progress. For example, a few years ago we were fortunate to see 100 reasonably credible deals a year; now the number is 160 to 180.

—Founding Partner of a GP focusing on mid-market investments