Michel Lowy, CEO and Global Co-PM of SC Lowy, a specialist Asian credit investor, discusses understanding the region at a local level when investing and the structural growth of the APAC region.
Michel Lowy has been an investor across Asian markets for more than three decades. Over that time, he has seen a huge change in how investment opportunities materialise. “When we first started after the Asian financial crisis in the late 90s, it led to lots of investment opportunities as banks were selling their loans. Now we are in an environment where there are oligopolies in the countries where we operate; it’s about interpreting that shift.”
Despite markets generally maturing across the APAC region, Lowy still views the region as structurally fragmented. “When you look at Asian economies, they are very insulated and internalised. So Korean investors only focus on Korea, Indian investors only focus on India.” Because of investors’ strong regional focus, SC Lowy has spent decades building up its local presence within markets to establish on-the-ground teams and understand their unique characteristics. “That network, which has taken a long time to build, is our biggest edge. This has seen us accrue expertise to understand both successful and challenging investments.”
Having this presence has helped the firm size up and assess opportunities across the region. “You have different scenarios across the region, and countries that are more developed than others.” He adds, “Economies such as Japan and Australia are highly developed and highly predictable, then you have the emerging economies such as India, which are developing rapidly but not yet entirely sufficient, and then you have others which are just not fit for investment.”
Lowy does not see the gap growing between the biggest and the smallest economies in the region, but rather an elevation of the middle, as their ecosystems mature and infrastructure improves. “We see the middle being lifted; places like India or Thailand are getting closer to the top. It is a similar dynamic to Europe over the past decade, where Southern Europe has improved and is getting closer to Northern Europe.” He sees the next wave of opportunities emerging “in Hong Kong around real estate and openings coming out of Australia.”
Listen to the full discussion below.
