"We see ourselves as a firm that can go into these volatile markets and operate well there," Frank explains. "We think Asia will be a similar challenge."
Among the large Asian economies Darby's looking at are China and India. In Southeast Asia, it's Indonesia, the Philippines and Thailand. And in North Asia, Darby is paying more and more attention to South Korea, which has worked hard to reform since 1997 and is seen growing by almost 6 percent this year.
Japan, of course, is the exception. Brady fears Tokyo is in denial over the extent of its troubles, especially a bad-debt problem that dwarfs the S&L crisis across the Pacific. Bad loans don't get better over time, he says, but worse. With each passing week, Japan's loan problem grows in size and becomes more costly.
At the same time, vested interests in Japan are blocking efforts to fix things. It's a good example of something Brady learned during the US banking crisis: You'll get no help from those whose economic interests caused the problems in the first place. Here, Brady says, the "extensive interlocked interests between Japan's political forces and its private sector" mean the nation isn't changing as fast as needed.
Whether Japan recovers or muddles along, Brady thinks Asia is a buying opportunity. And as other investors are realizing, the man's got a point.
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