How has the cost of capital for Asian acquirers been affected by the prevailing situation?
Capital cost and accessibility have increased and declined respectively. Debt spreads are substantially increased for almost all borrowers and equity costs are increased in such a volatile period. Access to debt finance is likely to remain a key feature of 2009, with ramifications extending well beyond the impact on M&A. What is the outlook for private equity firms as asset acquirers? I think the outlook remains positive, especially where the firms are well established, have a clear investment focus and strong links into the markets where they seek to do business. In Asia, private equity investments are even more collaborative than elsewhere, meaning that the rapport between private equity investor and management (and often, importantly, a family co-investor) is critical.
