When we spoke to fund administrators in the first half of last year, most were either in expansion mode in emerging markets or were just bedding down recent office openings in markets such as Hong Kong, Singapore and Dubai. Back then, the world was a different place from today: spurred on by seemingly uninterruptible economic growth, emerging markets saw large numbers of international firms mulling new funds and a rash of local managers springing up to take advantage of limited partner enthusiasm for new markets and of a wave of investment opportunities on the ground.

The descent into chaos of many of the more established markets and the global downturn that has resulted, has had its effect on emerging markets. As prospects for growth have been trimmed, over the short-term at least, fundraising by private equity firms for investment in emerging markets is in hiatus. The figures for 2008 actually show an increase on the previous record-breaking year, with US$66.8bn raised by emerging markets fund managers last year, a 12% rise on 2007’s US$59.2bn, according to the Emerging Markets Private Equity Association. But the signs of a decline were already apparent by the second half of last year, as the amount raised in that period showed a 20% drop over the last half of 2007.

Clearly, all this affects the fund administrators, many of which had assumed continued growth in the emerging markets in which they had chosen to expand...

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