Those looking for capital may have the most success in Indonesia or India. As a sign of the times, Jakarta will see the greatest expansion in the number of millionaires over the next ten years at a growth rate of 112%. That is following closely by Delhi and Mumbai at 107% and 105%, respectively. The top ten list is otherwise dominated by Chinese cities. Since much of this money is being generated by entrepreneurs, there is a natural proclivity to allocate to direct investments, rather than deploy it in financial assets such local stocks. This explains why a measure such as “equity-market capitalization as a percent of GDP” is often comparatively low in the developing world. The challenge for deal sponsors, however, is that any offer typically has to exceed a hurdle rate of return in the local market. And that can be difficult. ■
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