October, 2005 BusinessWeek story on
Cerberus sees chances in Japan,
Wed Jan 25, 2006 3:59 PM ET
By Michael Flahertys
NEW YORK, Jan 25 (Reuters) - Japan remains excellent territory for buyouts and Germany is also attractive private equity turf, former U.S. Vice President Dan Quayle said on Wednesday.
Quayle, who now chairs Cerberus Global Investments, a unit of hedge fund Cerberus Capital Management, was less excited about China. Despite its growing economy and a nascent buyout community, the country remains unchartered land for Cerberus, he said.
"We'll let others go there first," said Quayle. "It's still a jungle over there. You have to be very careful," he added, referring to China's legal system and the difficulties it could cause for corporate restructurings.
Japan, however, continues to be ripe for private equity investing, said Quayle, speaking at a luncheon at the Dow Jones Private Equity Analyst conference in New York.
New York-based Cerberus owns a majority stake in Japanese bank Aozora Bank, a deal that Quayle worked closely on and one that took years to accomplish.
"Once you're accepted in Japan's corporate community, it's very easy to work in that environment," Quayle said, adding that getting to that point of acceptance takes time.
The signs of Japan's rebellion against foreign investors have waned, he said, but traces of hostile sentiment still exist.
Last week Cerberus sued Japanese newspaper Mainichi Shimbun for libel, seeking $100 million in damages for a report linking Cerberus to organized crime.
Quayle told Reuters after the luncheon that he was against suing for libel, but that the firm's Japanese advisers said that such a move was necessary.
Quayle, the second-in-command to former U.S. President George Bush, was bullish about Japan's economy, and pointed to a recent deal by Toshiba Corp. as a sign of this strength.
The Japanese electronics conglomerate agreed on Monday to buy Westinghouse, the U.S. power plant arm of British Nuclear Fuels, in a deal estimated to be worth more than $5 billion.
"They're back," Quayle said, referring to corporate Japan. "The business psychology and confidence is quite strong."
Quayle said he also sees more investment opportunities in Germany, noting signs that "Germany's economy is ready for restructuring." Once the economic driver of Europe, Germany has struggled for years.
Quayle noted the power China holds over the U.S. economy, as most of the country's foreign exchange reserves, more than $800 billion to date, are invested in U.S. Treasuries.
"They have the capacity to give us a bad hair day," he said. "They really do."