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Private equity executives put North America ahead of emerging markets

In a poll of senior private equity executives by KPMG, nearly half of the executives pointed to North America as offering the best investment options, despite the perceived consensus that investment opportunities are ripest among the emerging markets.

Of the private equity executives surveyed at the SuperReturn US 2010 Conference in Boston this month, 48 per cent said North America was the best region to invest in based on competition, relative valuations, projected returns, economic outlook and relative ease of doing business.

China followed with 19 per cent of respondents, Latin America at 17 per cent, and India at seven per cent

When specifically asked which BRIC country is seen as the best investment, the US private equity executives polled favoured Brazil (42 per cent), followed closely by China (39 per cent); India was selected by 19 per cent of the respondents. None selected Russia.

"While many have buzzed over the last few years about the private equity opportunities in emerging markets, it’s clear that many US investors feel more comfortable on their home turf," says Shawn Hessing, national lead partner for KPMG’s US private equity group. "Private equity investments are by their nature complicated, and investors must consider how a country’s regulatory and political environment may impact a business. This becomes more difficult in a foreign, and in some cases distant, country."

Conference participants were almost evenly divided when asked which sector globally offers the most attractive returns now. Financial services and healthcare each led with 22 per cent of survey respondents, followed closely by infrastructure and energy at 20 per cent. Just 13 per cent of those surveyed selected real estate.

"I’m not surprised by the lack of a ‘break-out’ industry, as this economic environment offers attractive opportunities across almost all sectors," says Hessing. "Investors that do their homework will be rewarded, as deals today must be carefully considered on a case-by-case basis."

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