Asia-Pacific’s private equity market is showing signs of recovery, with deal value rising 11% to $176 billion, even though deal count declined 9%. The region’s average deal size jumped 22% to $133 million, supported by a 50% increase in megadeals valued at $1 billion or more. Buyouts drove momentum, accounting for over half of total deal value, and gained popularity even in traditionally growth-focused markets such as India, Southeast Asia, and Greater China. Lower interest rates across much of the region helped fuel this trend. Additionally, carve-outs gained traction, particularly in Japan and South Korea.
Although average returns on carve-outs remained modest, 44% of general partners (GPs) surveyed by Bain & Company consider them a top investment opportunity. India emerged as the strongest performer in the region, with both deal value and count increasing, backed by robust GDP growth and a deepening investor pool. Japan maintained stable deal activity, though its total deal value dipped due to fewer megadeals. Notably, global PE funds are pivoting away from China and increasingly targeting India and Japan, where deal activity has nearly doubled compared to the 2014–2018 average.
Technology retained the largest share of deal value and count but saw its portion shrink to 25%, down from 50% in 2018. In response to market uncertainty, GPs diversified their portfolios, driving growth in communications and financial services, particularly through sizable data center investments and loan-related deals in India. While investor participation declined 10% overall, India and Japan saw sharp increases in active investors, rising 29% and 14% respectively. This contributed to higher deal momentum and signaled shifting investor confidence. Exit activity remained flat, largely due to weak performance in China, but India led the region in both exit value and count, thanks to a vibrant IPO market. Bain’s survey found that 87% of fund managers expect returns to remain stable or improve over the next three to five years, reflecting growing confidence in the region’s long-term potential.
