* Asia private equity coming out of downturn faster -exec
* Asia private equity investments up 63 pct in 2011
By Stephen Aldred
HONG KONG, June 5 Asia's share of global private
equity investments has doubled to 21 percent in the past four
years, helped by last year's strong growth and that figure
should continue to rise, a top McKinsey & Co executive told
That dramatic rise in Asia private equity volumes could
signal a global shift in deal flows, with the industry in Europe
and the United States still subdued in the face of debt worries
and weak employment data, a new study by McKinsey showed.
"We're still punching below our weight in Asia, and we've
got a ways to go to catch up to our share if you look at global
GDP," said Bruno Roy, a partner for consultancy firm McKinsey &
Co, which authored the report.
The region has 28 percent of global GDP which means there is
room for further expansion, Roy said.
While investing in the first half of 2012 has been slow,
global investors in private equity funds are continuing to show
strong interest in the region.
Private equity investments for Asia in 2011 hit $65 billion,
up 63 percent from a year earlier. China continued its
dominance, capturing 45 percent of the region's private equity
"There's a clear shift to dealmaking in Asia. We are close
to 2006 levels and closing in faster on 2007, so we're coming
out of the downturn faster in Asia," Roy said.
Despite growing concerns about billions of dollars of unused
capital that private equity has stored in Asia for investments,
the McKinsey report suggests there is little risk the region's
markets will become saturated.
Private equity investments in 2011 in the US were equal to 1
percent of nominal GDP, but China, Asia's fastest growing
market, has a penetration rate of just 0.4 percent, the regional
And while the tight credit environment has made fundraising
tough even for Asia private equity funds, the same climate means
there is more demand than ever for private capital, with
distressed debt opportunities and restructuring deals likely to
increase, McKinsey concluded.