Dr. Alexander Mirtchev, President of Krull Corp., asserts that, despite the persistence of the global economic downturn, there are signs of revival in investment activity, in particular towards assets that appear undervalued. To a large extent, this resurgence reflects the growing assimilation of the realities of the multiplying power centers and the increasing significance of non-state actors, such as multinationals. Even though indications that growth in certain sectors may be on the rebound are far from reliable precursors of the end of the economic crisis, the continued uncertainty has not deterred select market participants, including private equity and sovereign wealth funds, from becoming more active in seeking investment targets among distressed assets that are perceived to have upside potential, in particular in areas aligned with their new agendas. This search for undervalued assets, or “bottom fishing”, can be interpreted as a trend of multinationals repositioning themselves for the new multi-centric global economy, where the vectors of productivity, growth, profit and economic power intersect across a number of dimensions. The targets for such “bottom fishing” are also determined by the belief that market recovery will be quite uneven, with some industrial sectors pulling ahead, while others remaining on a downward slope for longer periods, making post-crisis positioning as, or even more important that the trajectory of recovery, dependent on the depth and length of the slump in each specific industry.
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