Private equity deals in Asia have investors on edge

Investors are looking on with a degree of concern as private equity managers cut deals at soaring valuations.

Managers of private equity funds are buying companies in Asia at prices that are making their own investors worried, industry practitioners said at a conference in Hong Kong. 

As the valuations paid for companies climbs, the likelihood is private equity managers will see the internal rate of return IRR they can deliver fall in lock-step if they do not compensate by adjusting their investment strategy.

“We’re in a very hot vintage year and returns are going to suffer. At least, we’re paying valuations that we weren’t paying five to seven years ago,” said Omar Lodhi, partner and regional head in Asia for emerging markers private...

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