Although he believes investors, financiers and even regulators should be wary of the “overaggressive chasing of transactions” in Asia, Ralph Parks still reckons it is a “superb time to be an investor” there.
That’s because the new Asia chairman of Los Angelesbased Oaktree Capital Management, which has $32 billion in assets under management, believes the risk that comes with the stampede into Asia by private equity houses can be offset by an “overarching focus on value investing.”
It helps too that Parks -- who was JPMorgan Chase’s Asia chairman for five years before leaving in November -- is tasked with bringing to the region Oaktree’s expertise across a range of investment asset classes: real estate, and high-yield and mezzanine finance. These are “still relatively early days for the high-yield market and very early days for mezzanine finance markets in Asia,” says Parks, 62. “But given Oaktree’s long experience and presence in those asset classes, being among the early movers will have some advantages.”
The firm, which has offices in Hong Kong, Singapore and Tokyo, has already made forays into Asian real estate. Last month it joined a consortium of U.S. investors, including Greenwich, Connecticutbased Silver Point Capital and gaming developer David Friedman, that took a 40 percent stake in the planned Macao Studio City casino resort. The development in Macao, a special administrative region of China since 1999, will include luxury hotels, retail space, and television and film production facilities. Worth some $172 million, it is scheduled for completion in 2009.
Oaktree’s initial focus in Asia is on Japan and China, where it will open an office in Beijing in March. Parks says that the firm can deploy capital in Asia from its global funds and that he can call up $1.5 billion for investment by the end of March. Still, he asserts, “right-sizing available funds to match the supply of opportunities” is absolutely key.