KKR & Co. has overhauled its Asia-Pacific private equity team in the early stages of allocating capital from its $15 billion regional fund as deal making sputters on strained US-China relations.
Ming Lu, the firm’s Asia-Pacific head, will become executive chairman for the region to spend time on strategic initiatives, according to a letter sent to investors. Hiro Hirano will relinquish his role as co-head of private equity to become deputy executive chairman, while maintaining his role as head for Japan, according to the letter seen by Bloomberg.
Gaurav Trehan will be elevated to sole head of private equity for Asia-Pacific, in addition to his role as head of India. KKR has deployed $5 billion in the market since he joined in 2020, making India one of the firm’s largest and most active markets in Asia, the letter explained.
A Hong Kong-based spokesperson confirmed the contents of the document.
In other moves, Ashish Shastry, co-head of private equity for the region and head of Southeast Asia, and Jaka Prasetya, a partner for Southeast Asia, will become advisers. Apart from promoting Trehan, a former TPG Capital executive, KKR also put Akshay Tanna, recently hired from the same rival, in charge of India private equity.
Read more: Private Equity’s Rainmakers Struggle to Raise Cash in Asia
The senior management changes are among the most sweeping for global investment firms in Asia in recent years, coming just two years after KKR raised its biggest ever buyout fund in the region. Since December 2020, the firm’s heads of private equity in India, Greater China, Australia and Southeast Asia have stepped down.
Private equity investors have been facing heightened challenges of generating decent returns and navigating the increasingly complicated geopolitics in the region. Fund investors typically seek comfort in knowing that their general partners have a stable team and continuity.
Following a decade of rapid expansion in China-focused investments, global buyout firms have shifted gears and are instead bolstering dealmaking in India, Australia, Japan, South Korea and Southeast Asia.
Carlyle Group is accelerating investments in India as growth across sectors and the prospect of better exits mean the market is now catching up with China. Warburg Pincus LLC last year slashed about seven China dealmaker jobs.
Venture capital powerhouse Sequoia Capital earlier this month said it’s breaking up into three entities around the world, splitting the Chinese and US operations.
US-China relations crashed to their lowest point in decades in February, and deal making in the world’s second-biggest economy tumbled after the US sanctioned some China investments while Beijing cracked down on foreign businesses.
Read more: PAG, Carlyle Stung by Politics in $18 Billion Asia Fundraising
Equity offerings in Asia-Pacific slumped by almost a third in the second quarter from the first three months, while announced M&A deals fell 21%, data compiled by Bloomberg show. Private equity deals meanwhile slumped 44% in the region last year to $198 billion, according to Bain & Co.
(Updates with details on more industry moves in 10th.)