U.S. fund managers find bargains arising<\/p>\n
SAN FRANCISCO (Dow Jones): In early July, U.S. real-estate
\ncompany Colony Capital offered to buy a just-finished upscale
\nresidential development in the Philippines from its near-bankrupt
\nowners. The offer was for about US$30 million -- but the owners
\nrejected it.<\/p>\n
Three weeks later, however, their South Korean bankers told
\nthem to sell or be forced into receivership. The upshot: Colony
\ngot the property for 10 percent-15 percent less than it
\noriginally offered, reports the latest edition of the Far Eastern
\nEconomic Review published yesterday.<\/p>\n
\"It wasn't the first time in Asia when our earlier offer
\nwasn't accepted,\" says John Brady, a principal of the Los
\nAngeles-based company, which is one of the biggest private real-
\nestate investors in the U.S.<\/p>\n
As Colony's experience indicates, stricken Asian companies
\nhave often been reluctant to sell out to foreign investors.<\/p>\n
But now, more than a year into Asia's economic crisis,
\ncompanies in the region are finally starting to admit they need
\noutside help. That sea of change promises a wealth of new
\nopportunities for cash-rich investors from the U.S. and
\nelsewhere. With local sources of finance drying up, many Asian
\ncompanies need money for restructuring -- or just to survive.<\/p>\n
The openings for investment are better now than even a few
\nmonths ago, according to U.S.-based private investors who are
\npoised to reap potentially huge benefits. Asia's cash crunch has
\nforced sellers to accept deals they might recently have rejected.<\/p>\n
Combined with a revival of U.S. institutional interest in the
\nregion, this has led to a surge of new U.S. funds aimed at Asia.<\/p>\n
This is the moment that many investors have been waiting for,\"
\nsays Simon Murray, a long-time Asia hand. In July, Murray raised
\n$150 million for the first offering of his Asia-targeted Gems
\nfund, with U.S.-based GE Capital leading a pool of international
\ninvestors.<\/p>\n
One obvious attraction to private investors now is lower
\nprices. Many would-be investors stayed on the sidelines of Asia's
\nmid-1990s boom because prices relative to earnings were simply
\ntoo high.<\/p>\n
The region's economic crisis, and the slide in prices it has
\ntriggered, has now given them their chance.<\/p>\n
\"Prices are now 50 percent cheaper than they were a year ago
\nand the deals just keep getting better,\" says Murray, who hopes
\nto double the size of his fund by year's end. Adds Hsu Ta-lin,
\nchairman of Asia operations for Hambrecht & Quist (HQ), a San
\nFrancisco-based investment bank: \"They need the liquidity and we
\nhave the capital. It's a perfect match.\"<\/p>\n
The near-disappearance of local capital has also given outside
\ninvestors an entree to a whole new set of deals. \"Access is the
\nhardest part of finding deals in Asia,\" says Brady of Colony
\nCapital.<\/p>\n
\"Now we are seeing that situation improve.\" Eric Li, a partner
\nin the San Francisco-based venture-capital firm Orchid Asia
\nHoldings, recalls that before the crisis, the best deals went to
\nthe region's own, more aggressive financiers.<\/p>\n
\"Companies in Asia were playing one investor off against
\nanother. We couldn't even get a seat at the table.\" That has all
\nchanged now, he says.<\/p>\n
A rash of new private-investment funds provides evidence of
\nU.S. money-holders' heightened interest in Asia. They include
\nseveral \"vulture funds,\" so called for their hungry swoops on the
\ndistressed real estate that litters Asia's business landscape.<\/p>\n
Among them are an $800 million fund launched recently by
\nHouston-based developer Hines, which intends to invest more than
\n40 percent in Asia. New York-based Greenwich Group International
\nexpects to raise $2 billion-2.5 billion from U.S. investors for
\nAsian property purchases by the end of 1999.<\/p>\n
\"The response from investors has been overwhelmingly
\npositive,\" says Hsu of Hambrecht & Quist, which already has $700
\nmillion invested in Asia and expects by year-end to establish a
\nnew fund for the region worth at least $500 million. \"From an
\ninvestment perspective, the Asian crisis has become a great
\nopportunity.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/us-fund-managers-find-bargains-arising-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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