Kong Yiji restaurant filled with diners in Shanghai, China, June 28, 2023.
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From pet food to spirits and lights, global investment firm KKR is investing its money in a range of consumer-centric sectors in China, moving away from focusing solely on technology.
“Now we have invested around $6 billion in China. And our predominant goal was to give attention to what we consider is a market opportunity – domestic consumption,” KKR co-CEO Joseph Bae told CNBC’s “Squawk Box Asia”.
The corporate intends to tap into and cater to China’s growing middle class of 400 million people because it strives for higher quality food and repair. KKR also has an lively presence in various parts of China, with offices in Beijing, Shanghai and Hong Kong.
“We have invested in corporations like China’s largest pet food company, China’s largest lighting company, China’s retail pharmacy chains, China’s national spirits and spirits brands… They’re all driven by consumers,” Bae explained.
Last month, the State Council of China proposed measures for increase consumption household products, without going into details. China has also recently reported a slew of weaker-than-expected economic data, pointing to breathtaking growth rates and intensifying calls for more stimulus.
Bae added that the corporate didn’t give attention to some “sensitive areas of technology” – resembling semiconductors, artificial intelligence and supercomputers.
China last week imposed export restrictions on two metals key to semiconductor production, warning the US and Europe of an escalating technological trade war over access to microchips.
Bae also warned that geopolitical complexity between China and the USA has increased dramatically and called for greater caution in the way to put money into China despite competition between economic superpowers.
The assets of the investment company under management are over $500 billion todaywith its Asia PE fund, which boasts a $15 billion portfolio.
“We’re not only in private equity, we’re in growth equity. We are currently the biggest infrastructure investor in Asia,” Bae said, adding that KKR also has a private credit fund and platform within the region.