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Emerging Markets
Partnership (“EMP”), formed in 1992, is an international
private equity firm with headquarters in Washington D.C. Subsidiaries
and affiliates of EMP have offices in Hong Kong, Singapore, London,
Johannesburg, Abidjan, Bahrain and Brunei. EMP and its affiliates
currently serve as the principal adviser or manager of the following
private equity funds having $5.7 billion in committed resources:
- AIG Asian Infrastructure Fund (Asia I, $1.08 billion);
- AIG Asian Infrastructure Fund II (Asia II,
$1.67 billion);
- AIG-GE Capital Latin American Infrastructure
Fund (Latin
America, $1.01 billion);
- AIG Emerging Europe Infrastructure Fund (Emerging
Europe, $550 million);
- AIG African Infrastructure Fund (Africa, $407.6
million); and
- IDB Infrastructure Fund (IDB Fund, at first
closing: $700.5 million in equity commitments, plus $50 million for
a Special Projects Pool and $200 million for a Complimentary Finance
Facility)
These six funds
provide equity and equity-related capital to companies in infrastructure-related
businesses, primarily in the telecommunications, power and transportation
sectors. Professional staff of EMP or its affiliates locate and
evaluate potential private equity investments within their target region
that offer an attractive relationship between the risks involved and
the anticipated rate of return. The IDB Fund, through its Complemetary
Finance Facility, may also underwrite and provide Islamic Finance for
projects in which it makes equity investments.
In addition, EMP
is an adviser to The Emerging Africa Infrastructure Fund (Emerging Africa),
a $305 million fund recently established by a group of public and private
sector institutions to provide long-term debt to private sector infrastructure
ventures in sub-Saharan Africa.
Who is EMP?
Moeen A. Qureshi (Chairman) and Donald C. Roth (Managing Partner) founded
EMP to take advantage of opportunities available in private equity investment
in emerging markets. While they were working together at the World
Bank (Mr. Qureshi was Chief of Operations and Mr. Roth was Treasurer),
it became clear that marshaling private capital flows for emerging markets
offered an attractive business opportunity. There was a tremendous
need for private capital in emerging market countries, particularly
for financing infrastructure companies and projects. Since its
founding in 1992, EMP has become a world leader in infrastructure investment,
and believes its has greatly contributed to growth in this type of investment
as principal advisor to its private equity funds.
Messrs. Qureshi and Roth bring to EMP extensive experience in negotiating,
financing and executing major infrastructure projects, as well as wide-ranging
experience in other areas of international finance. Mr. Qureshi
served as interim Prime Minister of Pakistan in 1993. From 1977 to 1981
he was the Chief Operating Officer of the International Finance Corporation
("IFC"), the direct investment arm of the World Bank Group.
The IFC makes direct investments of more than $500 million per year
in the equity of private sector enterprises in emerging market economies. Prior
to his service with the World Bank, Mr. Roth was Chief Executive of
Merrill Lynch, Europe and before that, Chairman of the Merrill Lynch international
banking group. He has worked as an investment banker in Hong Kong, London, New York and Tokyo.
Arnold H. Weiss, an attorney with long experience in the financing of
infrastructure projects in the developing world, joined the founders
in structuring and getting EMP’s first fund, Asia I, off the ground. Mr. Weiss
has been the General Counsel of EMP since its founding, having previously
been General Counsel of the Inter-American Development Bank and an attorney
in a private practice for a number of years in Washington D.C.
EMP's Sponsors
EMP works closely with the sponsors and principal investors of its funds. American
International Group, Inc. ("AIG") is the sponsor of, and a
significant investor in, five of the infrastructure funds advised by
EMP or its affiliates. Investors in these EMP-advised funds include
a roster of blue-chip corporations, multilateral and private institutions
and government entities. Other sponsors and leading investors of the
respective funds include the following:
- Asia I and Asia II: Government of Singapore
Investment Corporation ("GICI")
- Latin American Fund: General Electric Capital
Corporation, Edison Capital
- Emerging Europe Fund: ABN-AMRO, Edison Capital
- African Fund: African Development Bank,
International Finance Corporation ("IFC")
- IDB
Fund: Islamic
Development Bank, Dar Al-Maal Al-Islami Trust; Sultan of Brunei; Government of Saudi Arabia; Government of Bahrain]
- Emerging
Africa: U.K. Government’s Department for International Development
("DFID"), FMO, Standard Bank, Barclays Bank
EMP’s sponsors
and investors co-invest with the funds on a side-by-side basis from
time to time, particularly in companies that have large capital needs.
Fund Advisory Boards
Most of the funds
advised by EMP and its affiliates have an Advisory Board composed of
representatives of the fund’s principal investors that reviews
the status of investments twice a year. Fund managers consult with
Advisory Boards on various matters, e.g., realignment of investment
priorities to reflect changed circumstances in a region. Advisory
Boards may also submit recommendations to the fund manager and advisers
on important financial, economic and political matters in the respective
region. Each Advisory Board includes a representative from each
core investor in the respective fund.
The following individuals,
preeminent leaders in their fields, serve or have served as Chairmen
of the Advisory Boards:
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• Asia I and Asia II |
Dr. Henry Kissinger |
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• Latin American Fund |
The Honorable Lloyd Bentsen |
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• Emerging Europe Fund |
M. le Gouverneur
Jacques de Larosière |
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• African Fund |
His Excellency Nelson Mandela |
EMP’s Co-Advisers
EMP benefits from
the services of co-advisers in several of the regions in which it operates. These
include the Bank of China and China International Trust and Investment
Corporation in China, the Inter-American Investment Corporation (the
private sector arm of the Inter-American Development Bank) in Latin
America, GICI in Asia, and the direct investment arm of AIG, AIG Investment
Corporation, in Asia, Latin America, Emerging Europe and Africa.
EMP Staff
EMP and its subsidiaries
currently have over 90 professionals in Washington, DC, and seven other
offices around the world. The professional staff has many years
of global experience earned in leading investment and commercial banks,
multilateral institutions and industry. Over the past five years,
these professionals have structured over 50 investments in EMP’s
first three funds (Asia I, Asia II and Latin American Fund).
In What Sectors do EMP-Advised Funds Invest?
Telecommunications
Systems and Services: Fixed line and cellular networks; broadcast and
cable television; international cable links; satellite and data transmission
systems; information technology and the Internet.
Power and Energy-Related
Facilities: Power generation, transmission and distribution systems;
district heating networks and energy service companies.
Transportation: Toll roads; mass transit; rail; shipping; urban
and inter-urban transport; bridges; tunnels; port facilities; airports
and airlines; multi-modal and freight forwarding services.
Natural Resource
Development: Mining and minerals processing; oil and gas extraction,
development and distribution; petrochemical industries; forest products,
pulp and paper.
Water, Sanitation,
Environmental Services: Drinking and waste water treatment and
distribution; other environmental services (Emerging Europe Fund, driven
by adoption of EU standards).
Basic Materials/Infrastructure-Related: Cement;
iron and steel; airport services; cable producers; industrial development;
construction-related and other industries.
Other Tourism,
agriculture (African Fund and IDB Fund)
What Investment Criteria are Employed?
EMP's experience
has shown that successful infrastructure investments will fulfill the
following essential criteria:
Strong local sponsorship,
with a meaningful investment in project equity;
A technical or operating
partner with an established reputation and a substantial equity stake
in the long-term success of the project;
A supportive regulatory
and political environment;
Investment in a
high-priority infrastructure sector and/or project for the country;
A realistic business
plan and a credible financing plan that meets the company’s foreseeable
needs;
Investment returns
that exceed the fund’s return thresholds under reasonable assumptions;
Representation for
the fund on the board of directors of the project company, or its equivalent;
and
A clear exit strategy
within the fund’s life.
EMP-advised funds
do not ordinarily hold a controlling interest in the equity of the companies
in which they invest.
Investment size
can range from US$ 10 million to over US$150 million, depending on the
fund and the investment. The funds have made several investments
in the $75 to $150 million range; the average investment made to date
is over $40 million. Investments are typically in companies with
some history of operations, but EMP-advised funds have invested in greenfield
ventures where an experienced operating partner was involved.
Why Partner with EMP Funds?
An investment from a fund advised by an EMP affiliate will bring with
it several advantages:
Experience—
EMP-advised funds have made more than $3 billion in infrastructure-related
investments. Individually, their advisory staff have extensive
and diverse experience, with most of its managing directors having more
than twenty years of investment experience each.
Size— With
$5.7 billion in committed capital, EMP-advised funds are among the largest
direct equity investors in emerging markets. EMP-advised funds
are in a position to consider making very substantial investments if
the project is one that may attract co-investment interest from fund
sponsors and investors.
Focus— EMP
focuses exclusively in emerging markets, primarily in infrastructure
and infrastructure-related industries.
Minority Interest—As
a general rule, EMP-advised funds do not seek majority control.
Value-Added—
Through their representatives on the boards of directors of investee
companies, funds advised by EMP-advised affiliates can provide valuable
financial and strategic advice, as well as guidance based on EMP’s
experience with similar industries in other markets.
Global Reach—
EMP can introduce its investee companies to its extensive network of
relationships around the world. EMP-advised funds cover all major
emerging countries over four continents.
Long-term Horizon—
Recognizing that infrastructure needs long-term capital, EMP’s
has structured its funds with a typical investment time horizon of five
to seven years. Its funds typically have a life of ten years, subject
to extension in extraordinary circumstances.
Strength—
Because of the size of the investments they can make, EMP-advised funds
can be the sole financial investor in a project, or they may act as
the lead investor in an investor group.
Co-Investment Opportunities—
EMP-advised funds, as a matter of policy, seek to provide co-investment
opportunities to investors, providing investee companies that have large
capital needs with potential access to significant additional sources
of capital.
Other EMP Activities
EMP Financial
Advisers, LLC ("EMP-FA")
EMP-FA is an advisory
practice that provides assistance to multilateral institutions, governments
and private entities, and internally to EMP. EMP-FA utilizes its
knowledge of global economic issues to provide its clients with analyses
of the forces shaping the economic environment in which they work, and
to present action-oriented recommendations that will allow them to sharpen
their focus and maximize their effectiveness.
Mr. Shahid Javed
Burki is the CEO of EMP-FA. Prior to joining EMP-FA, Mr. Burki
was a Vice President of the World Bank, where his career spanned 25
years. He also served as Finance Minister for the Government of
Pakistan from 1996-1997.
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