The ability to brazen out market volatility and challenging investment environment is the survival key during times of escalating geopolitical risks from trade tensions as the global economy, although shaken and slowed from the ongoing trade war between the United States and China, will likely resume growth from next year, said a senior executive of investment firm The Carlyle Group.
“Interest rates remain very, very low and valuations very, very high, while growth and profitability are slowing down,” said Lee Kewsong, co-chief executive officer of The Carlyle Group in an exclusive interview with the Maeil Business Newspaper on Wednesday.
“Clearly there is volatility now because of geopolitical events, and also it’s a challenging investment environment.”
Although the global economy was slowing, a recession is not in the making. The economy also will likely pick up next year, he said, adding unlike the past challenging periods, the global economy has the upside of “so much liquidity and so much money out there.”
Korea is experiencing, just like the others in the worlds, the “inability to grow at a rate the policy makers like.”
“Fundamentally, growth and earnings are coming down but asset prices are being pushed up because of low interest rates and so much savings and money going into the markets,” said Lee.
Lee expected that the global markets would weather through volatility stemming from geopolitical issues, such as Brexit, oil shock, and the U.S-China trade tensions and recommended long-term investments to beat volatility.
He stressed Korea is one of Carlyle’s important market, for its growing opportunities, “everything from divestures and carve out opportunities to chaebol to incredibility fast growing internet and e-commerce companies in Korea as well as mid-market private companies that need succession plans.” Asia has been Carlyle’s “strategic priority” and Korea is part of it, said Lee as he stressed his firm was “very optimistic” about private equity and capital opportunities in the region.
The Carlyle Group is one of the world’s largest investment firms with assets under management amounting to $220 billion. Its co-CEO Lee is currently visiting Korea for 2019 Seoul Investor Conference.
By Han Woo-ram and Cho Jeehyun
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