Asia private equitybacked MA value is up 13 this year
Lower funding cost, better market sentiment to boost PE exits

SINGAPORE, Sept 27 Reuters U.S. interest rate cuts and China39;s economic stimulus package for markets will be conducive to private equity deals in Asia, with lower funding costs and better market sentiment expected to make exits easier, industry players said.

The U.S. central bank last week cut interest rates for the first time in more than four years, with more easing expected. High interest rates over the past two years have weighed on private equity firms39; financing costs, making leveraged buyouts trickier.

China, on the other hand, this week unveiled broaderthanexpected monetary stimulus and property market support measures to restore confidence in the world39;s secondlargest economy, with more fiscal measures expected to be rolled out soon.

Private equity firms typically exit from their portfolio firms via initial public offerings of shares and trade sales, which have been made tougher due to the volatile market conditions.

With the Fed entering a ratecut cycle, we expect financing conditions to improve which will likely drive a recovery in exit activity and asset valuations, narrowing the valuation gap between buyers and sellers and creating more opportunities for dealmaking, Janice Leow, head of Swedish private equity firm EQT Private Capital Southeast Asia, told Reuters.

She added that liquidity would improve, creating a more favorable…