Global investment firm KKR & Co. is focused on Japan as a top priority for investing in private equity because it offers cheaper valuations than other countries.
The New York-based company is finding interesting opportunities in Japan where there is less competition, lower-cost financing for deals and more potential for operational improvements, said Joseph Bae, KKR’s co-president, at the Bloomberg Invest conference in New York on Tuesday.
Asia is the fastest growing part of the firm’s private equity business in terms of assets under management, deal activity and growth as an organization, said Bae. The firm now has eight offices in the region, he said.
“Some of the less understood opportunities are really perhaps in North Asia, in (South) Korea and Japan,” he said.
They have some of the cheapest valuations among mature economies today as well as massive conglomerates of family groups that are shedding noncore assets for the first time, said Bae.
Kewsong Lee, co-chief executive at rival Carlyle Group LP, also pointed to Japan in a separate talk at the conference. The country is seeing a fundamental restructuring, he said, and there’s tremendous opportunity there.