Private equity deals down 49% YoY in 2022

Total deals in the region declined to 97 from 108.

Singapore saw a 49% year-on-year (YoY) plunge in private equity deals in 2022 to reach around $9.5b (US$7.1b) as Southeast Asia records a slowdown in deal activity with a 52% decline in value.

According to Bain & Company, the deal count was also down by 10% YoY to 97 from 198.

Despite this, Singapore, along with Indonesia continues to attract the bulk of investment capital in the region, comprising 80% of the total deal value and deal count.

Greater China recorded the highest drop in deal value in the region at 53%, whilst Australia-New Zealand was down by 48%, Korea by 39%, Japan by 28%, and India by 25%.

“What we are seeing is a natural reaction to the global macro climate. Increasing interest rates, a softening economic environment and general uncertainty over the future have all made it more challenging to get deals done,” said Usman Akhtar, head of Bain’s SEA PE practice, based in Singapore.

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Bain added exit value in the region decreased by 46% YoY as investors faced challenges in the re-rating of public market valuations, declining portfolio performance, and fewer avenues for exits in the lower initial public offerings.

Singapore’s exit value dipped by 48%, whilst the count increased by one to 10.

The Internet and tech remained the primary investor sector in every market followed by healthcare and financial services.

However, the long-term outlook for capital investment in the region remains positive due to the improvement of the macroeconomic conditions and the ongoing geopolitical tensions between the US and China will create opportunities for businesses.

“SEA remains an attractive place to deploy capital in the long term. The market fundamentals are there, and investors will be able to find attractive opportunities. However, competition will be intense for these assets and multiple expansion will no longer be a sustainable return driver. That puts more pressure on investors to create value during their ownership period,” said Suvir Varma, senior advisor of Bain’s global PE practice, based in Singapore.

US$1 = S$1.34