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Private equity looks to Vietnam and Indonesia: Survey

Published on Dec 10, 2012 8:38 AM
Employees work at L'Oreal's new factory in Cikarang, West Java, on Nov 7, 2012. Cosmetics giant L'Oreal on Nov 7 opened its biggest factory in the world in Indonesia, as it seeks to profit from strong demand for beauty products in fast-growing Asia. -- PHOTO: AFP

LONDON (REUTERS) - Higher prices for companies in North America and political and regulatory risks in China are leading private equity investors to consider the emerging markets of South-east Asia, a survey has found.

Private equity firms that raised money from pension funds, insurers and endowments on the promise of delivering superior returns, have unearthed few deals in China and have competed fiercely for the businesses they can find, pushing up prices.

The trend to higher prices is echoed in private equity's largest market, the United States, where the supply of cheap financing from lenders has given buyout firms the firepower to pay more for companies.

Nascent Asian economies such as Indonesia and Vietnam were favoured by one fifth of investors over the region's more mature markets including China and India, according to a survey conducted by private equity firm Coller Capital.

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