“So, I may not invest in emerging markets per se, but I may invest in companies which do most of their business in the emerging markets but they’re listed in New York, etc. It’s a much more complicated story that just throwing money into an emerging markets fund.”

Accordingly, MLC is looking at the small- to mid-cap market, and unlisted companies because these sectors may be more tapped into the domestic market more than the globals.

But, MLC has found a dearth of expertise in private equity firms in these economies. “There are relatively few [private equity] firms in these economies. We’ve found a few, but we continue to look at this untapped market,” Parker said. “The biggest challenge is finding good people. It’s crucial to find the 5 per cent who are really good.”

There’s a lot of persistence in returns in private equity, Parker said. By that, he means that the best private equity players tend to become known and thus gain access to the best deals, which gives them the best upside. “Good performance tends to be self-replicating,” he said.

Over five to 10 years, Parker said the best private equity managers do +100 per cent a year, while the worst did -30 per cent a year. “The mediocrities do no better than a passive equities story,” he concluded.

Parker speaks to the value of patience in the private equity sector.  “We have the benefit of a very long-established program since 1997, one of the longest established private equity teams in the country. It’s about relationships. It’s a long-term game. People have been too impatient with private equity. Traditionally, private equity is about buying and improving, not just leveraging up the balance sheet and flogging them off.

“As the opportunities expand, MLC’s private equities desk will expand. As the quality in these economies improves, and as the number and quality of private equities firms improves, we’ll be allocating more money to that region. The opportunity set at the moment is still pretty limited. You don’t want to compromise on quality when it comes to private equity managers; the best managers get the best deals and the best returns. The rest fight for the scraps.”