Walkers, the global offshore law firm of choice for investment banks, international law firms, collateral managers, and other financial institutions, reported today that they expect the global private equity market to continue its growth, led largely by continued interest in emerging markets such as India, China, and the Middle East. Other factors, according to the firm, are U.S. private equity firms;desire to engage in more international deals focused on the middle-market, instead of solely high-end deals.
U.S. private equity firms look internationally for deals, and investors in Europe continue to expand their portfolios, the global picture for private equity continues to be strong', Ian McMurdo, Investment Funds Partner for Walkers,said.' "Markets such as Dubai,India ,China continue to mature,opening to outside investors,local companiesare partnering with US and European managers to use offshore structuresto increase their opportunities for foreign investment.'"
. These changes are good for offshore financial centers such as the Cayman Islands, Jersey, Dubai, and the British Virgin Islands that can offer neutral jurisdictions for complex deals involving parties from multiple countries.
Globally, private equity investments in the emerging markets of Asia,
Eastern Europe, Latin America, the Middle East and Africa, rose by 29
percent in 2006 to a total of US$33.2 billion, according to the Emerging
Markets Private Equity Association (EMPEA). Asia attracted the greatest
amount of capital, with US$19.4 billion raised, with 35 percent of those
funds in China and India alone. The Middle East saw a 54 percent increase
in private equity investments.
Leading private equity houses, such as Blackstone, Oaktree Capital and
Providence Equity Partners, all announced plans to increase their
activities in Asia earlier this year. Baird Private Equity, Darby Overseas
Investments, and D. E. Shaw have also announced a focus on Asia, including India and China.
There has also been cross-border interest among emerging markets.
Earlier this month, Al Salam Bank-Bahrain reported that it plans to invest
in private equity and real estate in Asia Pacific region, with an initial
focus on China. Gulf Finance House, an Islamic investment bank, also
recently announced the creation of a European private equity division to
offer Middle Eastern investors opportunities in the European private equity
market.
India, too, continues to attract great attention, garnering US$2.21
billion of private equity investment in 2006, according to Thomson
Financial. Huge deals like the US$960 million Idea Cellular pre-IPO
placement and the US$725 million buyout of the Indian software unit of
Flextronics International by Kohlberg Kravis Roberts helped grow the total
figure. Other factors, such as companies looking to private equity
investments instead of IPOs, also contributed to the growth. Some Indian
leaders are also suggesting that core infrastructure projects be open to
funding from private equity and venture capital groups.
"Another change we are seeing is that while huge buyout deals continue
to make headlines, many of the U.S. private equity groups are looking at
mid- market investments," said Caroline Williams, an Investment Funds
Partner at Walkers. "This adjustment is good for the long-term health of
the market and will also relieve market fears around some of the mega-deals that have closed in the past year."
Goldman Sachs, TPG, and Silver Lake Partners have all announced recent strategies to invest in mid-market deals. Goldman has pledged US$1 billion of its own money for investments ranging from US$50 million to US$100 million each.
In addition, the growth of multi-disciplinary firms continues with
hedge funds such as Cerberus and Fortress making private equity investments and private equity funds such as Blackstone and Carlyle sponsoring hedge funds.
"We welcome the challenges presented by this convergence of hedge funds and private equity funds," Deborah Poole, an Investment Funds Partner at Walkers, said. "It offers further opportunities for our global team to leverage its expertise in the hedge funds industry and develop practical solutions for clients in the constantly evolving investment funds market."
To help manage the market growth, Walkers has promoted several of its associates. Philip Paschalides and Sonia Starvis were made partners in the Finance Group and Property Group respectively. Caroline Williams has also been named a partner in the Investment Funds Group, with a specialty in private equity.
As part of its private equity engagements, Walkers offers multi-
jurisdictional and multi-disciplinary services. The firm advises on
offshore fund formation and is instructed on portfolio acquisitions
undertaken by its private equity clients.
About The Walkers Group
From offices in the Cayman Islands, the British Virgin Islands, Dubai,
Hong Kong, Jersey, London, and Tokyo, the Walkers group provides legal and management services to leading FORTUNE 100 and FTSE 100 global corporations and financial institutions, capital markets participants, investment fund managers, and growth- and middle-market companies. The Walkers group is comprised of leading offshore law firm, Walkers; fund services provider, Walkers Fund Services Limited; and SPV and corporate services providers, Walkers SPV Limited, Walkers (Jersey) Limited, and Walkers (BVI) Limited.
In 2006, Walkers was named as the "Who's Who Legal Law Firm of the
Year: Cayman Islands," the "PLC Which Lawyer? Yearbook" Leading Cayman Islands Law Firm, "The Lawyer"'s Offshore Law Firm of the Year, and was one of two firms honored as "Offshore Legal Team of the Year" by the Society of Trust and Estate Practitioners (STEP).
For more information on the Walkers group, visit us on the Web at
http://www.walkersglobal.com or contact us by e-mail at
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. To contact Walkers by phone, call our Cayman
Islands office at +345-949-0100.
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