I believe innovative frontier market institutions can produce annual returns for wealthy individuals, multinationals and institutional investors, in the range of 8 percent to 10 percent over about 10 years, with risk managed to a moderate level. Remember that the Abraaj Group, that private equity firm in growth and frontier markets, has a loss ratio of less than 2 percent.
Moderate returns in unfamiliar and complex environments is not compelling for average investors.
But our task resonates with investors who understand the crucial importance of balanced global growth. The Middle East and Africa in 1990 had a population roughly the size of Europe. By 2050 it is forecast to be four times the size. Unless we find a way to sustainably deploy investment from the private sector at large scale in the countries and sectors that matter, all of our coming generations face a harsher, more chaotic world.
— By Kito de Boer, a Jerusalem-based Dutch national, former senior McKinsey director and diplomat now serving as head of mission of the Office of the Quartet, which includes the U.N., European Union, Russia and United States and mediates between the Israelis and Palestinians. He is also a CNBC-YPO Chief Executive Network member.
CNBC and YPO have formed an exclusive editorial partnership consisting of regional "Chief Executive Networks" in the Americas, EMEA and Asia-Pacific. These Chief Executive Networks are made up of a sample of YPO's global network of 24,000 top executives from 120 countries who are on the front lines of the economy and run companies that collectively generate $6 trillion in annual revenue.