Conglomerates may be regarded as dinosaurs in the developed world, but in emerging markets, diversified business groups continue to thrive. Despite the recent global economic slowdown, their sales rose rapidly during the past decade: by over 23% a year in China and India, and by 11% in South Korea. Business groups accounted for 45, 40, and 20 of the 50 biggest companies (excluding state-owned enterprises) in India, South Korea, and China, respectively, according to a recent McKinsey study. They may be called different things in different countries-qiye jituan in China, business houses in India, grupos económicos in Latin America, chaebol in South Korea, and holdings in Turkey. But no matter where they are, business groups are becoming increasingly diversified. On average, they set up a new company every 18 months, more than half the time in a sector unrelated to their existing operations. Most of them are profitable. In India, they deliver above-average performance: Companies belonging to the largest Indian business groups generated higher returns on assets from 1997 to 2011 than the rest of the companies listed on the Bombay Stock Exchange, according to a study we conducted, and more than 60% of those groups generated better returns than a comparable portfolio of standalone companies did.