The Asia Pacific region offers a host of attractive opportunities for profitable mezzanine investment, according to Babson Capital Management.
The US-based investment management firm was currently considering various mezzanine debt and private equity investment opportunities available in the Asia Pacific market, Babson Capital’s Asia Pacific head Mike Hermsen told InvestorDaily.
“An ongoing strategy of ours is that we’re very focused on providing mezzanine debt to leveraged buy-out transactions in the middle market, with a particular focus on Australia,” he said.
“But we’ll also do occasional deals in the established economies in the Asia Pacific including Japan, Hong Kong, Taiwan, Korea and Singapore.”
Of those Asia Pacific economies, Korea was currently the most attractive market for investment opportunities, according to Hermsen.
“It’s a large economy obviously and it’s growing at rates that are probably as good or better than almost any economy in Asia other than China, so that makes it pretty interesting,” he said.
“It’s also got a reasonably well-established leveraged buy-out market and it’s got a pretty good private equity community as well – they tend to be pretty prudent in how they leverage their balance sheets, so we like that aspect.
“Culturally, it’s pretty reasonably easy for us to do business in Korea, so we’re pretty encouraged about that.”
Hong Kong also provided logical investment opportunities, Hermsen said.
“Hong Kong tends to be a little bit more orientated towards faster-growing companies that usually have a China angle, so there’s less of a middle market buy-out opportunity within Hong Kong,” he said.
“But there are still some deals that come from there and Hong Kong is one of the most benign places in the world for us to do business, so we usually like to do business there quite a bit.
“Taiwan is an opportunity as well, probably a little less so than Korea and Hong Kong.”
