On June 28, 2023, in Shanghai, China, Kong Yiji’s restaurant was packed with diners.
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From pet food to alcohol and lighting, global investment firm KKR has shifted its focus from technology to investing in a range of consumer-driven industries in China.
KKR co-CEO Joseph Bae told CNBC’s “Squawk Box Asia”: “We’ve invested about $6 billion in China. Our core focus is really what we think is the sweet spot of the market opportunity — domestic consumption.”
The company intends to capitalize on and cater to the demand for higher quality food and services from China’s growing middle class of 400 million people. KKR is also active in different parts of China with offices in the capital Beijing, Shanghai and Hong Kong.
“The companies we’ve invested in include China’s largest pet food company, China’s largest lighting company, China’s retail drugstore chain, China’s domestic liquor brand…all of these are consumer-oriented,” Bae explained.
Last month, China’s State Council proposed measures Promote consumption Household products, no detailed introduction. China also recently released a string of weaker-than-expected economic data, pointing to weakening growth momentum and calls for more stimulus to grow.
Bae added that the company’s focus is not on “technologically sensitive areas” such as semiconductors, artificial intelligence and supercomputing.
Last week, China imposed export curbs on two metals critical to semiconductor manufacturing, sending a warning to the escalating technology trade war between the United States and Europe over access to microchips.
Pei also warned of a sharp increase in geopolitical complexity between the U.S. and China, and called for greater caution in investing in China despite competition between the economic superpowers.
The assets managed by the investment company are Over $500 billion todayIts current fund size in Asia amounts to US$15 billion.
“We don’t just invest in private equity, we invest in growth equity. We are the largest infrastructure investor in Asia today,” said Bae, adding that KKR also has private credit funds and platforms in the region.