KKR & Co. (KKR:US), the New York-based private-equity firm run by Henry Kravis and George Roberts, expects a “real opportunity” in Spain and plans to invest in countries or regions where most investors avoid.
All but two or three large banks in Spain face difficulties, Kravis told reporters Singapore, and companies can’t get capital. Spain’s economy contracted for a fifth quarter, adding pressure on Premier Mariano Rajoy to seek more European aid even as the euro area’s fourth-largest economy met a bill-sales target.
“That creates a real opportunity for us because we will go in and say look we’re perfectly happy, willing to buy the asset off your bank or because a company can’t get financing, be it equity or debt financing,” he said. “We see that as an opportunity because we’ll be there.”
The country’s bonds have declined since European Union leaders last week failed to discuss further aid for the nation at a Brussels summit. Rajoy has struggled to trim a 2011 budget deficit that was more than three times the EU limit, after the country’s deepening recession pushed the jobless rate over 25 percent, sapping demand and tax revenue.
KKR may also seek investments in China, a market that’s “highly fragmented,” according to Joe Bae, managing partner of KKR Asia. The firm has made 14 investments in China in the past seven years, he said.
“What people don’t appreciate sometimes is that there’s been a dramatic decline in valuation multiples in that marketplace,” Bae said. “As long-term investors, that’s a very, very positive trade-off. We are actually quite bullish on China right now.”
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