Reflections on Risk at IFC

Risk management is on everyone’s mind. Managing risk, coupled with exploring the right opportunities, were key focuses of attendees at International Finance Corporation’s Global Private Equity Conference held in Washington, D.C., on May 16 and 17. Here are some insights from conference attendees on private equity emerging markets:

“From a high level, we see more opportunities in Latin America and in Africa. If you look at that from a GDP point of view, much more [opportunities] should be in Asia. There is more capital  chasing opportunities there, pushing prices up.”
-Torborjon Caesar, Senior Partner, Actis

“There continues to be a disconnect between where growth is happening in the world and where money is being invested.”
-Charles Kaye, Co-CEO, Warburg Pincus

“We’ve heard from our portfolio fund managers that often when there is an ESG lens applied to a company from the very early days, it actually makes exit quite a bit easier. Particularly, if you are in some of the dodgier emerging markets, because you know there’s not going to be corruption or government bribes and that sort of thing.”
-Lauren Cochran, director of private investments, Blue Haven Initiative

“In both India and China, and other emerging markets, the industry is increasingly mature at a time when the economies are still at a nascent stage of development. In the US, that wasn’t the case, so growth opportunities were not as prevalent. The entire economy wasn’t growing at the kind of rates that China and India have been growing—that led to the development of the buyout markets.”
-James Ahn, Managing Director, Clayton, Dubilier & Rice on why the buyout market is less prevalent in India and China

“The Brazilian economy is starting to turn around, fueled by lower inflation and lower interest rates. We see opportunities in middle markets growth companies and expect 20% plus dollar returns.”
-Jaime Cardoso, partner, Bozano Investimetos

“Be as nice as possible to the people you reject. When we say no to an investment, we like them to succeed anyway and a lot of the stuff we’re doing right now are deals we’ve rejected a few years ago.”
-Michael Calvey, senior partner, Baring Vostok Capital Partners

“Frontier market investing is a labor of love.”
-Marvin Yeo, Founding Partner, Golden Rock

“There’s a shortage of good projects and a wealth of capital chasing them.”
-Marc Immerman, principal , Metier, said of infrastructure investments