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KKR, CVC, Carlyle Expect More Asia Deals

(Reuters) – Global buyout firms in Asia-Pacific see growing investment opportunities in the region in the next six to nine months as companies seek alternative sources of financing because of turmoil in global markets and tighter credit.

While rising competition presents challenges, private equity firms including CVC Capital Partners Ltd, Carlyle Group and KKR & Co LP see opportunities in countries such as Indonesia, China and Japan, particularly in consumer, real estate and healthcare.

“The next 6-9 months is a good time to make investments, subject to, obviously, how things go in the United States,” said X.D. Yang, managing director and co-head of Carlyle Asia Partners, speaking on a panel at the SuperReturn conference in Hong Kong.

Valuations were becoming more attractive, which made it easier to strike deals, he added.

“It’s easier for us to talk to management about changing their business now, than when things are really great, when they wouldn’t listen to you,” he said.

Speaking on the same panel, Joseph Bae, Asia head of U.S. buyout fund KKR said he expected a steady stream of investment opportunities around the region, including Japan where the firm had previously been “bearish.”

“If you look at the valuations, for some deep value investing, fundamental investing, Japan is awfully cheap now,” he said.

Bae, who came to Asia in 2005 to establish KKR’s business in the region, said he was looking for good companies, not to play in the distressed space.

“We’re spending a lot of time there because I think the market now is fundamentally cheap,” he said.
Maarten Ruijs, managing partner and chief investment officer of CVC Asia Pacific noted that the Australian government’s stance on taxation was an added challenge to private equity in the region.

“It has an ultra-aggressive approach to our industry, which is completely unwarranted to be honest. Australia has a big capital deficit and should welcome foreign investment.”

(By Stephen Aldred and Elzio Barreto; editing by Chris Lewis)