Our Australian cattle business, Consolidated Pastoral Company, likes to show investors a world map with East Asia circled, covering Japan, China, India and Indonesia. They point out that more people live inside that circle than outside it in the rest of the world. It’s that population density and the dynamism of growth in Asia – the continuing drama in China notwithstanding – which will make it the locus of economic power globally in the decades to come, and which will create tremendous opportunities for the private equity industry.
Family offices and high net-worth individuals across Asia are also beginning to embrace private equity. It was often the case that many Asian high net-worth individuals made their money in real estate, and preferred to invest their wealth in something they understood, rather than in funds managed by third parties. But now there is an increasing understanding of the need to diversify portfolios, and of the long-term value that private equity investments can generate.
Guy Hands is founder, chairman and chief investment officer of Terra Firma