KKR Releases “Indonesia: Harnessing its Potential” by Henry H. McVey
June 7, 2017New Macro Report Highlights Opportunity in Southeast Asia’s Compelling Macro Backdrop
“Indonesia has one of the most compelling stories that we see across
KKR’s global footprint,”
Following a recent trip to the region,
-
Indonesia’s macro game plan now seems more in synch with the potential
obstacles the country faces. Perhaps more important, though, is that
central bankers, government officials, and CEOs all now seem more
committed to delivering on the “game plan” needed to elevate
Indonesia into one of the elite destinations for investor capital. -
Within our
ASEAN footprint,Indonesia has clearly emerged as one of the most attractive pure-plays on our view that global capital flows will increasingly migrate towards economies with large domestic consumption. - Within the region, we see several industries in transition where investors should be buyers when prices become more realistic. These include E-commerce, health services, wellness, entertainment, nourishment, education, and even consumer financial services.
-
While absolute rates are low in
Indonesia relative to history, local debt actually still looks compelling. - Consistent with this view on local debt, we are now more sanguine on emerging market currencies.
-
Private Credit in
Indonesia represents an opportunity, but deal sizes are still small and sourcing engines will likely be needed to boost capital deployment in this product area. -
Our research on
Indonesian Public Equities suggests that we are at an inflection point. - Similar to what we have seen in other big emerging markets, we believe that the opportunity for investors to use Private Equity to arbitrage the Public Equity markets is large and growing.
McVey continues: “To be sure, there are still risks, but our research
and our visits lead us to conclude that
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About
About KKR
KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world‐class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners’ capital and brings opportunities to others through its capital
markets business. References to KKR’s investments may include the
activities of its sponsored funds. For additional information about
The views expressed herein are the personal views of Henry McVey
of KKR and do not necessarily reflect the views of KKR. This
information is not research and should not be treated as research. It
does not represent valuation judgments with respect to any financial
instrument, issuer, security or sector that may be described or
referenced herein and does not represent a formal or official view of
KKR. It is being provided merely to provide a framework to assist in the
implementation of an investor’s own analysis and an investor’s own views
on the topic discussed herein. There can be no assurance that an
investment strategy will be successful. Historic market
trends are not reliable indicators of actual future market behavior or
future performance of any particular investment which may differ
materially, and should not be relied upon as such. This
information should not be viewed as a current or past recommendation or
a solicitation of an offer to buy or sell any securities or to adopt any
investment strategy. References to a target portfolio and allocations
are hypothetical allocation of assets and not reflect an actual
portfolio. The views expressed herein and discussion of any target
portfolio or allocations may not be reflected in the strategies and
products that KKR offers or invests, including strategies and products
to which
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