Rising demand for alternatives drove private equity investment value to a new high in Asia Pacific, according to a report by Bain & Company, but there are questions about the outlook for China.
Private equity investment value reached a record high of $296 billion, according to findings from Bain & Company’s latest «2022 Asia-Pacific Private Equity Report».
Deal value in Japan, Southeast Asia and South Korea more than doubled in 2021 compared to 2020. While Greater China continued to dominate the region, accounting for 43 percent of total deal value, 2021 marked a new trend with India outpacing it for the year to achieve 20 percent of total APAC deal value.
«The fact that every market in Asia Pacific had such positive records truly is remarkable considering all the uncertainty facing the global economy last year,» said Lars Verheyen, Bain & Company partner and co-author of the report. «This is a testament to the region’s strength and continued place of growth, innovation and opportunity for the market.»
China Confidence Hit
Although more than 60 percent of APAC general partners (GP) remain confident about the region’s macroeconomic outlook in 2022, there were doubts about China with just 35 percent of GPs expressing confidence with challenges such as slowing growth and uncertainty for the country’s internet and technology companies.
Reflecting these concerns, Greater China-focused fundraising in the second half of 2021 «slowed significantly» compared to the first half.
«As investors grow more cautious toward China and seek deals elsewhere in the region, India's private equity market may benefit,» the report added. «For Asia-Pacific-focused funds attracted to the internet and tech sector, India’s increasing digital penetration and strong domestic IPO market are likely to be a powerful lure.»
