VIDEO: Clearwater Capital’s Robert Petty

Speaking with AVCJ about the opportunities of Asia's distressed marketplace, an asset class on which Clearwater focuses, Petty says that the sheer size of Asia's debt market is bound to uncover companies that "may not have done it perfectly."

"If you just look at the IMF [International Monetary Fund] data, $19 trillion, or half of everything that you can buy in emerging markets, is Asian credit," Petty says. "It's a lot bigger than people think. Go look at the public multiples of companies listed in Asia and you'll get roughly three-to-four times the average leverage ratio of Asian companies. They're growing fast. So $19 trillion in debt in Asia - corporates borrow, sovereigns don't borrow, and that is actually a tremendous arena in which to operate."

He adds the companies that emerge as the most promising targets have the telltales of good businesses, but may have gotten "their capital expenditure on a particular project wrong."

Petty goes on to discuss the one major challenge facing the private equity industry, as well as Clearwater's approach to China.

Read more on Asia's distressed and special situation landscape, and that of Australia - a traditionally popular market for such investments.

 

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