Private-equity market fares well in most regional states
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IN SPITE of some macro turbulence, the Asia-Pacific private equity deal market posted a record year overall in 2015.
However, the story was not as promising everywhere, according to Bain & Company’s “Southeast Asia Private Equity Report 2016”.
In Singapore, Thailand, Indonesia, Malaysia, Vietnam and the Philippines, the private-equity market remained restrained with economic uncertainty, rich valuations and high competition keeping investors on the hook as they waited for a pay-out.
This subdued climate is likely to continue.
As the economic expansion nears its seventh anniversary and signs of instability are beginning to appear, investors must weigh future recession risks and focus on adapting for tumultuous times if they want to realise significant returns.
Deal value in Southeast Asia slid to US$4.2 billion (Bt150 billion) in 2015 – about one-third of the five-year average – delivering its worst showing since 2004.
Deal count dipped from 59 in 2014 to 43 last year. Only Singapore and Indonesia bucked this trend, leading the region with 29 deals that made up 90 per cent of total deal value.
About 30 per cent of deals in Southeast Asia last year were in the Internet sector, with deal count and value about 2.4 times higher than the previous five-year average.
Exit value improved compared to 2014, but at $6.7 billion was slightly below the 2010-14 average.
A bumpy IPO market and the volatile macro context also hindered exit activity, which was 35 per cent below historical levels, except in Singapore, where activity remained mostly on par with the previous year.
