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Nisha Gopalan

Private Equity Has the Cash, and It Is King

Firms that sat on their hands as valuations remained high in Asia can now expect their pick of bargains.

The coronavirus has hit consumer companies hard in China.

The coronavirus has hit consumer companies hard in China.

Photographer: Qilai Shen/Bloomberg

Private equity firms, sitting on a record $388 billion of dry powder in Asia, may be about to get their reward for patience. Cash is king as corporate finances are stretched by the coronavirus outbreak. Having sat on their hands for much of the past year in protest at unappealing valuations, the virus-induced stock market meltdown is creating a potential parade of bargains. Blackstone Group Inc.’s reported plans to acquire Hong Kong-listed property company Soho China Ltd. may be just the start.

High valuations are the number one complaint of private equity firms devoted to the Asia-Pacific region, according to a Bain & Co. report last week. Prices hadn’t budged significantly before the outbreak even as economic growth slowed in China, the region’s top destination for such investments. That’s because owners and entrepreneurs have been spoiled for choice: More than 3,000 private equity firms are jostling to find opportunities in Asia.