Asian market is still growing

31 August 2007

Despite the credit crunch in America and Europe, the Asian market is still growing and providing private-equity firms with a good way to raise money.

The Asian market has been a continually good source of investment and has even broken records this year.

Kohlberg and Kravis Roberts & Co will exceed a $2.8 billion fund by Affinity Equity Partners when they seal a $4 billion Asia fund, making it the largest Asia private-equity fund ever.

TPG is expected to top that as sources say they are close to a $4.2 billion deal.

Private-equity firms are buying companies and hoping to make a profit by an outright sale or offering stock.

Speaking to the Wall Street Journal, Andrew Ostrognai, a partner at law firm Debevoise & Plimpton LLP, said: "The fund sizes are getting larger. A few years ago, a $1 billion fund was huge. Now a lot of people are raising that much, and we're seeing funds raise well over $3 billion."

The Asian market has not been badly affected by the sub-prime situation in America because leveraged buyouts that rely on credit are not so common.

Growth capital is more popular and does not use leverage so is less open to the problems in the credit system.

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