The ten-year outlook for private equity in Asia is looking better than the last decade, according to KKR partner Ashish Shastry.

“I’m more optimistic about private equity in Asia in the next 10 years, versus the last 10 years,” Shastry said, speaking at an investment forum organised by private capital platform Moonfare.

There are significant opportunities, particularly for buyout and control transactions in Asia, driven by the region’s evolving dynamics over the last five to seven years. Growth equity deals have tended to dominate the region’s private equity transactions.

“Emerging markets used to be a minority investing game. That’s changed,” said Shastry, who serves as co-head of private equity for KKR Asia Pacific, and head of Southeast Asia. 

For instance, in 2019, KKR led a consortium that included GIC to invest $685 million in Metro Pacific Hospitals, the largest hospital group in the Philippines. The investment will help the group expand; it has since grown to 20 hospitals from 14 at the time of the transaction, Shastry noted.

With control investments, “the [PE] playbook has become predictable and almost Westernised,” Shastry said. “That’s what’s really changed – how we’re driving value creation.”

Another driver of the private equity industry’s growth is Japanese conglomerates divesting non-core assets. “Out of the 10 largest buyouts in Japan in the last five years, KKR has done eight of them,” Shastry noted. “Japan is a huge opportunity.”

The deals KKR has done in Japan include acquiring Hitachi Transport System, and the $1.67 billion carve-out in 2014 of Panasonic Healthcare, which was then listed on the Tokyo Stock Exchange in October 2021.  

Still, there remain broader concerns that could impact investors, Shastry noted, pointing to geopolitical tensions and policy risks, as well as tightening liquidity conditions. 

Against that backdrop, one sector that could turn attractive this year is tech, Shastry said, owing to “capital scarcity”, as investors shy away after a volatile year. 

KKR is currently deploying from its Asian Fund IV, a 2020 vintage fund that closed in September 2021 above the target at $15 billion.