South Africa-based Standard Bank says the long-term fundamentals of emerging markets private equity remain strong, offering tremendous growth prospects generally, and specifically a real p
South Africa-based Standard Bank says the long-term fundamentals of emerging markets private equity remain strong, offering tremendous growth prospects generally, and specifically a real private equity opportunity.
The bank says the opportunity is driven by a number of factors, including increasing wealth levels and a growing middle class leading to consumer-driven growth, enormous demand for infrastructure, and resources and commodity supply.
Speaking at the Emerging Markets Private Equity Forum in London, Standard Bank Private Equity head Graham Thomas said: ‘We are focusing on sectors that benefit from the current macro climate in our target markets and in particular from increasing consumer demand driven by economic growth and an increase in overall wealth levels and consumable income.
‘Standard Bank has proven its long-term commitment to emerging markets and has on-the-ground expertise and resources. The complexity of our target markets, including for example South Africa, Nigeria, and Turkey, and the need to know your way around them plays to our strengths. Standard Bank’s in-country presence offers a differentiated proposition to private equity investors.’
Thomas stressed the vital importance of retaining discipline during a time of market volatility, noting that Standard Bank focused on investments of between USD10m and USD50m for significant stakes in ‘good solid businesses’ and planned to stick to a disciplined and focused strategy.
‘Although there may be some retreat from emerging markets generally in the short term, which will have an impact on private equity funding, I think this will be a good thing long term,’ he said. ‘There are obvious knock-on effects from current global economic conditions, but in the long term the dynamics and fundamentals of the markets remain strong and represent a secular trend.
‘The industry was in danger of getting a little overheated and a period of tougher funding will make sure it continues the disciplined development path it needs to deliver value in the long term. Emerging markets private equity has a terrific future and will be a long-term wealth generator for investors and for the countries themselves.’
Johannesburg-based Standard Bank spans 18 countries across the African continent and 20 countries outside Africa including Brazil, Russia and China. Its corporate and investment banking division offers clients banking, trading, investment, risk management and advisory services in developing economies throughout the world, with particular sector expertise in mining and metals, oil, gas and renewables, telecommunications and media, power and infrastructure, agribusiness and financial institutions.
