International Investments in Private Equity

Chapter 6. Global markets, regional penetration, and country risk

Chapter Outline

6.1. Global private equity and the size of regional markets109

6.2. Why do penetration rates vary so much?115

6.3. The quality of the business environment and permissible markets121

6.4. Assessing country risk127

6.4.1. Economic risk128

6.4.2. Political risk129

6.4.3. Governance risk130

6.4.4. The risk heat map131

6.5. Summary and conclusions133

Appendix 6.1: A brief guide to publicly available sources that may help investors assess the quality of the business environment134

In Chapter 5, we have argued that global investing may help increase risk-adjusted returns of private equity portfolios. Until recently, the potential for international portfolio diversification ...