Goldman Sachs Group launches an asset hunt in Asian region

Goldman Sachs Group launches an asset hunt in Asian region

BANGKOK (Reuters): U.S. investment bank Goldman Sachs Group
Inc is on a hunt for undervalued and recyclable assets across
Asia as it seeks to plant its footprint in the region.

The president and managing director of Goldman Sachs (Asia),
Richard Gnodde, said on Friday his team would look at investments
in high technology companies, hotels and the financial sector
where it thought management could be improved or extra value
squeezed out.

But the bank, which went public in a $3.7 billion stock
offering in May, is not about to turn itself into an electronics
company or start running hotels.

"We are interested in acquiring assets and seeking a good
return -- not buying the entity," Gnodde told reporters in
Thailand.

"But we can help strengthen the management team. Every
investment is different. There are clearly situations where we
believe that returns can be improved by helping the management do
its job better," he said.

Goldman Sachs has spent huge sums in Asia over the last few
years, mostly in long-term investments and often in partnership
with other companies with particular expertise.

It has spent around $2 billion in Thailand alone in a range of
industries, notably in Thailand's Rajadamri Hotel, which runs
Bangkok's five-star Regent Hotel.

With GE Capital, it was also one of the biggest bidders in the
public auctions of assets from 56 defunct finance companies after
they collapsed during the financial crisis of 1997 and 1998.

Gnodde said the partnership with GE Capital would continue:
"It has proven successful and we would hope to extend that
partnership in future."

He promised to continue investing in Thailand and the rest of
the region if it continued to recover from the recession that was
sparked by the devaluation of the Thai baht and other Asian
currencies in 1997.

"We are building our franchise. We are building it as fast as
it is advisable so to do. We are going to continue to expand our
footprint over time," he said.

"The business is to acquire assets and recycle those assets."

Gnodde said Goldman Sachs had a team of 20 professional
bankers in Hong Kong looking constantly at investment options
across Asia and another team in Japan doing the same.

They would invest where they saw valuable assets, typically in
blue chip companies.

"We typically don't expect to sell those assets for five,
seven or more years," he said.

Goldman Sachs would look at investing in companies where its
experience in enhancing shareholder value would be appreciated.

He said this might mean some family businesses would not
welcome the bank's attentions, seeing it as an "asset stripper".

Managements had to be oriented towards maximizing returns for
investors, he said. "We don't want to put our money where
management are creating value for another purpose."

"You have to run a competitive value-for-money business and we
run businesses to maximize value," he said. "If a management
wants to run a business in a way opposed to shareholder value,
that's up to them. But we would not invest in the company."

He said he had seen no discernible increase in nationalistic
hostility to foreign investors in Asia since the region's crisis
and said any country that allowed it to restrict foreign
investment would suffer.

"Nationalism has a price... Each company, each individual,
each country is competing for capital, and capital is going to go
where returns are highest."