Private equity must delve a little deeper into Asia
Friday, 5 October 2007
Sundeep Tucker
ANOTHER day, another closure of a multi-billion dollar Asian-dedicated private equity fund. Last Tuesday it was the turn of Morgan Stanley, whose specialist division has made some smart investments in private Chinese companies.
But firms such as Morgan Stanley, and its specialist global private equity rivals, are going to have to think smarter and smarter to put money to play. By the end of the year, there will be about $50bn worth of Asian-dedicated private equity funds to deploy. That's without leverage.
China and India largely remain growth capital markets, Japan is yet to take off and Australia has come off the boil since the heady days this year when buy-out firms almost took out Australia's Qantas airline. Expect private equity firms to think out of the box to splash their cash - such as teaming up with strategic buyers for assets.
Bain Capital and Huawei Technologies, a Chinese telecoms equipment maker, have bid for US-listed 3Com while Carlyle Group and National Hire appear poised to swallow Coates Hire, the Australian equipment rental company. Firms will also delve deeper inland into China and India, to unearth provincial gems and charm entrepreneurs with their international contacts.
The global institutions throwing private equity money at Asia will not want to see their cash sitting idle -- while they pay hefty management fees.
........................................
FT Syndication Service
ANOTHER day, another closure of a multi-billion dollar Asian-dedicated private equity fund. Last Tuesday it was the turn of Morgan Stanley, whose specialist division has made some smart investments in private Chinese companies.
But firms such as Morgan Stanley, and its specialist global private equity rivals, are going to have to think smarter and smarter to put money to play. By the end of the year, there will be about $50bn worth of Asian-dedicated private equity funds to deploy. That's without leverage.
China and India largely remain growth capital markets, Japan is yet to take off and Australia has come off the boil since the heady days this year when buy-out firms almost took out Australia's Qantas airline. Expect private equity firms to think out of the box to splash their cash - such as teaming up with strategic buyers for assets.
Bain Capital and Huawei Technologies, a Chinese telecoms equipment maker, have bid for US-listed 3Com while Carlyle Group and National Hire appear poised to swallow Coates Hire, the Australian equipment rental company. Firms will also delve deeper inland into China and India, to unearth provincial gems and charm entrepreneurs with their international contacts.
The global institutions throwing private equity money at Asia will not want to see their cash sitting idle -- while they pay hefty management fees.
........................................
FT Syndication Service