6. Despite the difficulties of investing in emerging markets, why have private equity firms continued to focus on these opportunities?
7. What are the advantages for funds that are denominated in local currency?
8. Why might the Chinese government have opposed the Carlyle Group’s proposed buyout of Xugong Group even after the buyout firm increased its valuation and reduced its ownership?
9. What led to the success of the Central European Enterprise Funds?
6]
PE firms have continued to focus on emerging markets as they offer opportunities for growth that are not available in developed markets. Despite the difficulty and higher risk, they offer higher reward (returns). Developed markets are mostly mature, and do not have the type of growth seen in emerging markets
7]
Funds that are denominated in local currency have these advantages :
8]
The Xugong group is a strategically and nationally important company as it manufactures heavy construction machinery for domestic use. China was at that time in a rapid expansion with high demand for heavy machinery. Ceding a large stake in such an important company to a foreign group may have been seen as disadvantageous to the Chinese, in spite of the higher valuation and reduced ownership.
9]
The Central European Enterprise Funds success can be attributed to :
6. Despite the difficulties of investing in emerging markets, why have private equity firms continued to...
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