NZ investors directed to high growth countries
NZ investors directed to high growth countries – Indonesia rated No. 1
22 November 2012
New Zealand investors should consider focusing on “high growth” countries such as Indonesia, Myanmar and Malaysia rather than concentrating on markets such as India and China, according to Grant Thornton's 2012 Global Private Equity Report.
The report, based on 143 in-depth interviews held with senior private equity practitioners around the globe, outlines a backdrop of deteriorating sentiment around the global economy.
Russell Moore, Transaction Advisory Services Partner, for Grant Thornton New Zealand Ltd, said that the report highlighted a realisation that the speed of growth in booming markets such as India and China has slowed noticeably and they were not immune from the impacts of the global downturn.
“While the sentiment is negative, it is not necessarily all gloom and doom. Western Europe is expected to remain subdued with only 27% of respondents predicting an increase in investment activity over the next 12 months. This contrasts with North America, where 59% of respondents predict an increase and the Middle East and North Africa where 60% expect an increase,” he said.
Growing economic powerhouse Indonesia, with a population approaching 250 million, is rated No. 1 amongst the high growth markets for private equity investment in the survey.
“New Zealand investors should look closely at the survey’s top 10 ranked countries - Indonesia, Peru, Colombia, Turkey, Myanmar, Egypt, Saudi Arabia, Mexico, Ghana and Malaysia.
“You only need to look at the visit this week of Prime Minister John Key and President Obama to Myanmar to understand why it might be on this list. Located at the eastern edge of India, south of China and west of Thailand and rich in minerals, it is slowly emerging from 50 years of military rule. New Zealand already has a presence in this country with Fonterra and Beca leading the way.
“Turkey, Egypt, Saudi Arabia, Mexico and Malaysia are all countries that are well understood by New Zealand investors and while a move to such unknown territories may be a risk too far for many, there are private equity funds that are active in these regions.
“For investors looking at these regions, they should look for private equity firms with a successful track record, a coherent strategy and a quality team that can deliver that strategy,” he said.