AVCJ Forum Keynotes: Asia becomes even more important

Asia's continued growth has made the region even more important for global private equity firms, as well as increases the influences of local players within the global arena. In his keynote presentation, Carlyle's David Rubenstein predicted that Asia will grow in significance, replacing Europe as the counterweight to the US. He also tips several leading Asian private equity firms to follow the lead of their US counterparts and seek public listings.

The ongoing sovereign debt crisis in Europe seems to be a major concern for most global private equity firms including KKR, whose co-founder Henry Kravis identified as his firm's "biggest concern." He also added that the deep systemic problems that the U.S. and Europe are contributing to this historic shift of economic power from the West to the East. "I think that will continue without a doubt," Kravis told the crowd at the Gala dinner.

Earlier in the day, financial services guru Chris Flowers said that he expects volatile times ahead due to the situation in Europe, and advises investors to keep plenty of cash at hand to take advantage of buyout opportunities that will present itself as the euro zone countries unravel themselves from the mess.

TPG's Jim Coulter stressed the need to focus on China in particular, highlighting the fact that 67% of savings in China is cash, where he believes is a tremendous opportunity for entrepreneurs who can create asset management products that will appeal to these savers. "If you look around the world, some of the largest fortunes created are in the asset management area. And in China, this is going to be an extraordinarily important area in the next couple of years," he said.

The speakers were a bit cautious about the relationship with government. Rubenstein observed that governments, especially in the emerging market, compete to attract leading private equity firms because their presence is seen as a sign of sophistication. He also noted that the same governments are also likely to facilitate the development of local private equity firms into global players.

Meanwhile, Kravis warned of increased scrutiny of the industry if Mitt Romney, who co-founded Bain Capital, is selected as the Republican nominee for the US presidential election.

In spite of the concerns about other markets, it is clear that most speakers and delegates are seeing clear reasons to be optimistic about Asia. From the continued growth of the Chinese private equity market, to the revival of the Australia buyout market, to the changing perception on corporate Japan, the regional industry is finding more and more reasons to take a long term perspective.

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• Topics
• GPs
• Greater China
• AVCJ Events
• TPG Capital
• The Carlyle Group
• KKR
• Henry R. Kravis