Last year was best year for region’s private equity industry

The private equity (PE) industry in the Asia-Pacific region chalked up a record showing last year, with all signs pointing to it having entered a new era - one defined by a broader market, intense competition and shifting sources of value.

Bain & Company's (Bain) Asia-Pacific Private Equity Report 2018 points to deals being larger, investment broader and large global investors being more active than ever, with all markets in the region rising to new highs, and total deal value reaching a record level last year.

"Overall, the Asia-Pacific PE industry has never been healthier," said Mr Suvir Varma, leader of Bain's Asia-Pacific Private Equity and Sovereign Wealth Fund practice, who wrote the report.

He added, however: "For fund managers and investors, the region clearly has reached a turning point, with implications for both future investment decisions and portfolio company management."

The global management consultancy's report said that, despite intense competition, steady economic growth may no longer propel multiples.

PE firms will need to help their portfolio companies accelerate organic growth and improve operations, to maintain high returns in a changing environment - and that, in turn, will require new skills and capabilities.


Looking back at last year, Bain's report said the region's PE deal value soared to US$159 billion (S$209 billion) last year, up 41 per cent over 2016 and 19 per cent higher than the previous all-time high of US$133 billion in 2015.

Exit value reached US$115 billion, making it the second best year on record, just below 2014's, while exit activity hit a record high.

Fund-raising rose 6 per cent to US$66 billion, above the five-year historical average.

Two key forces powered growth last year: investors' rising confidence in the region as the macro climate improved; and company owners' greater overall acceptance of PE funding. - THE STRAITS TIMES