However, while some funds report a declining quality of deal flow in recent months, the general perception remains that the buyout market is healthy. We continue to see a lot of activity, particularly in Korea, sporadically in South East Asia, and we're beginning to see it in Japan. I think in Hong Kong it is just chunky. Wong says her firm's experience suggests that in Korea, to date the preeminent buyout market, divestiture by conglomerates continues to be strong. I think some of the situations just take a long time to close.
Some people make the argument that more can be done.
The government perhaps should not have put so much subtle pressure on the banks to bail out the groups. But despite that, there's a lot of auctions and divestitures that keep everyone busy. For political trouble spots like Indonesia, though they remain difficult places to close deals, IBRA continues to plug away with its fire sales, with some success, albeit slow. Deals such as PT Astra at least point to the possibilities in beleagured markets, says Wong. We think that Asian companies in the next few years, will try to become more focused on their core competence, which really means that they need to divest from peripherals, thereby raising a lot of opportunities for us.