Slowing economic growth in China and Brazil is fuelling hope among cash-flush private equity groups that there will be more dealmaking opportunities this year.
Investor interest in the two emerging-market economies has long outpaced the number of available investment opportunities for private equity, resulting in funds sitting on large amounts of undeployed capital. More than $100bn of funds in Asia, for example, are waiting to be put to work. This is the largest amount of dry powder in years, according to Mitul Patel, head of Asia Research at Preqin, the data provider.
When the Chinese and Brazilian economies were booming, and when companies and markets were still relatively under-developed, entrepreneurs and businesses found they had little need for the capital or advice offered by private equity.