Asia still offers cheap investment options, Carlyle Group's co-chief executive officer David Rubenstein said, even as concerns build over increasing competition for buyout deals from sovereign wealth funds and other investors.
Valuations of Asian companies are a fifth lower than assets in the US, Rubenstein said in an interview Friday with Bloomberg Television's Betty Liu. The firm is focused on China and India, he said, adding that Japan is “very important for us.“
“The theory's always been that Asia is very expensive,“ Rubenstein, 67, said. “It might be expensive in certain areas, but generally, it's cheaper than the US right now.There's really a bargain here.“
Plentiful funding for buyout deals from financial institutions and sovereign wealth funds in Asia continues to propel already steep prices in the region. Valuations on Chinese private equity transactions, which represent close to half of the Asia-Pacific market, reached record levels in 2016, according to a recent survey by Bain & Co.
Private equity activity in Asia is about one-sixth or one-seventh the level seen in the US, Rubenstein said, adding the growth of the entrepreneur sector in China, at a 15% to 18% rate, provides investment opportunities. Carlyle has done about 90 deals worth $7 billion in China, he said.
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