Deal value across the region reached a record high of $185 billion in 2020, up 19 percent from 2019 and 23 percent over the previous five-year average, spurred on by investor activity in China, India, and Japan.

Dealmaking was the bright spot in 2020, reaching a fresh peak of $185 billion, helping Asia-Pacific assets under management rise to 28 percent of the global private equity market, according to Bain & Company’s 2021 annual «Asia-Pacific Private Equity Report,» released today.

While China and India increased their share of deal activity in the region, travel restrictions affected deal activity significantly in Southeast Asia, where deal value declined 16% over the previous five-year average, the report said. 

Challenging Environment

The environment also remains challenging, as exits hovered close to a 10-year low and fundraising tumbled.

Exit deal value totaled $70 billion, down 24 percent year-on-year and 40 percent from the previous five-year average. Funds focused on Asia-Pacific raised $90 billion, down 32 percent year-on-year, 53 percent from the prior five-year average, and 64 percent from the peak year of 2017. By contrast, global PE fund-raising declined only 11 percent.

Among the top concerns of the 162 general partners (GPs) surveyed were high valuations, increased competition and the ongoing impact of Covid-19.

2021 Trends

Four out of five GPs expect the macroeconomic climate to be more favorable in 2021, as vaccines against the Covid-19 virus are rolled out more extensively.

Asia-Pacific GPs are most interested in investments in digital health, e-commerce, and e-learning, as digital business models accelerate. They also identified reslience as a key trait of winning portfolios, with some 60 percent saying they would invest at least 5 percent of short-term profits to improve resilience. 

«Improving macroeconomic conditions coupled with many exciting investment opportunities, especially in digitally advanced sectors, will continue to draw strong interest from investors,» Andrea Campagnoli, a partner in Bain & Company’s Private Equity practice based in Singapore, said.