Investing in Frontier Markets Private Equity is not as risky as most people perceive, says the CIO of the private sector arm of the World Bank

Rapid growth in emerging markets continues to attract investors, many of whom face pressure – against a backdrop of low performance of traditional investments – to seek the higher returns available in these markets, but face challenges determining where, how, and with whom to invest. Main observations regarding emerging markets private equity are:

(i) returns outperform both developed market private equity and emerging market listed stocks, while exhibiting low correlation with developed markets investment strategies;

(ii) the scope is broad and growing – Asia funds dominate by number, but the opportunity today is much broader;

(iii) risks are lower than conventional wisdom suggests and can be managed with sufficient resources and commitment