| HONG KONG
HONG KONG Oct 21 Kohlberg Kravis Roberts
is placing an early bet on a slowdown in the Chinese
economy, and plans to expand into Hong Kong in the next six to
nine months with its $2 billion special situations unit, the
Financial Times reported on Friday.
The buyout group's plans follow news that top TPG Capital LP
dealmaker Weijian Shan has raised $875 million for a
distressed asset fund to invest in Asia under his PAG group.
PAG's fundraising and KKR's expansion come as some analysts
predict that distressed and "special situations" opportunities
will rise across Asia when banks and corporations seek to
dispose of assets or look for capital for operations.
European banks including BNP Paribas SA , Credit
Agricole SA and Societe Generale are selling
portfolio assets in the region as they shore up their capital
Small and mid-sized enterprises (SME) in particular face
increasing difficulties to raise capital. SMEs account for 60
percent of China's industrial output and employ 80 percent of
its workforce, but are struggling to raise funds as they cope
with surging costs and dwindling profits.
"There will be opportunities in China, especially in the
property company sector. There's a huge amount of property
company bonds already trading at 20-30 percent yields. I don't
think China will blow up, but some of the companies there will,"
Wilbur Ross, chairman and chief executive of U.S. turnaround
investor W.L. Ross told the FT.
KKR recently established a $140 million real-estate fund
with Sino-Ocean Land , to invest in Chinese real
Asia-focused distressed debt funds have raised only 6
percent of the $197.3 billion in global capital that went into
the asset class in the past seven and a half years, the FT
reported, citing data from research firm Preqin.