(Corrects to say press briefing not at KKR's office; fixes
format and headline.)
* Bain, Blackstone, General Atlantic, Warburg Pincus
allocating resources to SEAsia
* $139 billion in dry powder in Asia, $130 bln new funds
* Around $10 bln being raised for Indonesia-focused funds
alone - Preqin
By Stephen Aldred
HONG KONG, Oct 25 The public appearance of Henry
Kravis at KKR's new Singapore office underscores the private
equity industry's growing interest in Southeast Asia, at a time
when regional funds are growing and deal volumes are falling.
Kravis will meet the press on Thursday as he opens the
firm's Singapore office, a rare move for the co-founder of KKR,
who prefers to stay out of the limelight after decades of
arranging some of the world's largest leveraged buyouts.
The Kravis event occurs at an important time for KKR & Co LP
, as the New York-based firm pushes ahead with raising a
$6 billion Asia private equity fund, which would be the largest
such fund ever devoted to the region.
While Asia, with its persistent growth, is an attractive
target for global investment firms, striking acquisition deals
in the region remains a challenge for the industry.
Competition among local and global investment firms is
rising in Asia, where the number of targets remain small
relative to the amount of money available.
In Southeast Asia, Blackstone Group and General
Atlantic are also opening Singapore offices, while Warburg
Pincus and Bain Capital are hunting for executives to
build teams to invest in the region's fast-growing economies.
But with deal volumes falling and an average equity
investment per deal in Asia of around $40 million, according to
an industry estimate, investors in private equity firms have
Private equity M&A deals in the Asia-Pacific region fell 17
percent in the first nine months to $22 billion from a year
earlier, according to Thomson Reuters data. The drop came as
regional markets declined, forcing buyers to wait out the storm
and sellers to wait for better valuations.
Investors are worried that managers will end up either
overpaying in order to put a large pool of money to use, or will
be unable to put the entire amount to use given the relatively
small deal sizes.
Some investors, however, point out that corporates are in
great need of capital across Asia, and the time will come when
private equity cash will increasingly fill that void.
Asia now has $139 billion in so-called dry powder, or
uninvested capital, with another $130 billion in new funds
currently being raised for investments, according to
Singapore-based data provider Preqin.
Preqin estimates that around $10 billion is being raised
through Indonesia-focused funds alone.
Others are less concerned about firms striking bad deals if
they invest too quickly or overpay due to competition. They
maintain that Asia's economies can absorb more capital, and that
private equity is underpenetrated in the region.
Kravis's visit to Asia coincides with a similar trip by
rival Stephen Schwarzman, CEO and co-founder of Blackstone Group
LP, who is hosting a press conference at his firm's Hong
Kong office on Friday.
At KKR's new Southeast Asia headquarters on Thursday,
Singapore Deputy Prime Minister and Minister for Finance Tharman
Shanmugaratnam will give a speech alongside Kravis.
The last time Kravis delivered a speech in Asia was in
November 2011, going off script to discuss U.S. presidential
candidate Mitt Romney.
During that speech, he warned that private equity would face
increased political and regulatory pressure if Romney, formerly
CEO of Bain Capital, ran for president. Romney has since won the
Republican nomination and is competing to capture the Oval
Office from incumbent Barack Obama.
(Reporting by Stephen Aldred; Editing by Ryan Woo)