Wednesday, 10 June 2015

Private equity firms hit by weak ringgit, smart investment strategies needed

The weaker Asian currencies, including the ringgit, have hurt private equity (PE) firms’ performance in dollar terms.

Navis Capital partner Raj Ayadurai said PE firms just have to “be smart” in their investment strategies by putting money into companies that are both domestically-focused and export-orientated as a “natural way to hedge”.

A panel at the second South-East Asia Venture Capital and Private Equity Conference concurred that private equity funds did not usually hedge against foreign currencies.

“It’s hard to hedge against forex changes because we don’t know when exactly we will exit from an investment,” said Ashish Shastry, managing partner Northstar Group, an Indonesian focused private equity firm.

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