Question

are equity funds targeted to firms in developing countries

Answer 1

Developing countries are often underpenetrated Markets and they have a full potential of development into the longer term, so these investors who are investing from the outsiders as foreign direct investors will always be targeting into the equity shareholders of these companies of developing markets because it will offer them a very good chance of getting a very high percentage of capital appreciation on their investment because gaining on through the equity of these companies can lead to a large potential of making a large return because it is not just related to making return due to Capital appreciation but it can also be helpful in getting a higher rate of return through exchange rate fluctuations because developing countries exchange rates are valued much lower than those of developef countries and this will be going more down so they can even gain through the exchange rate fluctuation.

Equity capital of these firms in developing countries are always targeted in order to gain a very good upside in the long run and have a control of these companies as well because these investors are always targeting these markets in the developing economies which has a large potential of upside.