<article>While private equity (PE) activity in Asia-Pacific (APAC) set an all-time record in deal value last year, 2016 will not likely sustain similar trajectory, <a style="color: #000080;" href="http://www.bain.com/" target="_blank">Bain &amp; Co</a> says.</article>

While private equity (PE) activity in Asia-Pacific (APAC) set an all-time record in deal value last year, 2016 will not likely sustain similar trajectory, <a style="color: #000080;" href="http://www.bain.com/" target="_blank">Bain &amp; Co</a> says.
Despite falling oil prices, slowing global economy, fluctuating currency and a whopping $5 trillion sell-off in China, 2015 had seen a rise of 44 per cent in APAC PE deal value to $125 billion, twice the average of the preceding five years.
“Last year was an exceptional year for deal-making. By comparison, 2016 will likely be much softer,” Bain’s Private Equity Practice in Asia-Pacific lead Suvir Varma said, in the 2016 APAC Private Equity Report.
“As the macro story across the region deteriorates, PE is wading into unfamiliar territory – a slower growth environment that will make it much more difficult to find good companies, improve their performance and exit them at market-beating returns,” he added.
In Bain’s survey of 125 PE executives in the region on their three to five-year industry outlook, respondents point to China’s economic deceleration as the true test for the PE industry’s resilience and creativity in the coming year.
Varma added that with changing landscapes in different parts of the region, firms will be wise to abandon their one-size-fits-all strategies to find profitable opportunities. <a href="http://www.dealstreetasia.com/wp-content/uploads/2016/04/APAC-PE-drypowder.jpg" rel="attachment wp-att-36994"><img loading="lazy" decoding="async" width="917" height="579" class="size-full wp-image-36994 aligncenter" src="http://www.dealstreetasia.com/wp-content/uploads/2016/04/APAC-PE-drypowder.jpg" alt="APAC PE drypowder" srcset="https://media.dealstreetasia.com/uploads/2016/04/APAC-PE-drypowder.jpg?w=917 917w, https://media.dealstreetasia.com/uploads/2016/04/APAC-PE-drypowder.jpg?resize=768,484 768w" sizes="(max-width: 917px) 100vw, 917px" /></a>
<h3>Record year for APAC PE</h3>
Deal count in 2015 climbed 34 per cent to 955, breaking through the 900 mark for the first time. For the second year in a row, China, Hong Kong and Taiwan (Greater China) led the charge in Southeast Asia and Japan.
Although deal value tumbled in 2012 and 2013, 2014 saw a surge in Greater China deal value by 194 per cent. Last year, the numbers grew another 56 per cent to $69 billion, accounting for about half of APAC’s total.
India and South Korea also posted record deal flow, while activity ebbed in Southeast Asia and Japan.
The average deal size hit record high, ballooning to $131 million, 45 per cent higher than the five-year average, Bain reported.
The management consulting firm noted that exit activity across the region came up to $88 billion even in the face of extreme volatility in the equity markets.
Greater China drove more than half of the exit value in the region, spurred by several large-scale initial public offerings (IPOs).
Among the key trends that shaped 2015 were the surge in megadeals, particularly in China and South Korea, which propelled the region’s strong investment value growth.
These deals, larger than $ billion in value, accounted for 43 per cent of total transaction value across the region, more than double the value of a year earlier.
<img loading="lazy" decoding="async" width="912" height="563" class="size-full wp-image-36992 aligncenter" src="http://www.dealstreetasia.com/wp-content/uploads/2016/04/APAC-PE-megadeals.jpg" alt="APAC PE megadeals" srcset="https://media.dealstreetasia.com/uploads/2016/04/APAC-PE-megadeals.jpg?w=912 912w, https://media.dealstreetasia.com/uploads/2016/04/APAC-PE-megadeals.jpg?resize=768,474 768w" sizes="(max-width: 912px) 100vw, 912px" />
Public-to-private buyouts soared to $17 billion in value, more than three times the five-year average, and made up 14 per cent of total PE deal value in 2015.
There was strong activity among large institutional investors and sovereign wealth funds (SWFs) as well, which have long shown keen interest in the APAC PE market.
SWFs and institutional investors co-invested with traditional PE funds in 74 transactions representing $36 billion in value last year.
In terms of sectors, the Internet sector was by far the hottest area of focus in Asia-Pacific in 2015, Bain noted.
Investors across the region plunged a record $36 billion into 371 Internet-related deals in 2015 and another $15 billion in 141 technology companies.
<img loading="lazy" decoding="async" width="925" height="561" class="size-full wp-image-36993 aligncenter" src="http://www.dealstreetasia.com/wp-content/uploads/2016/04/APAC-PE-Inv-Value.jpg" alt="APAC PE Inv Value" srcset="https://media.dealstreetasia.com/uploads/2016/04/APAC-PE-Inv-Value.jpg?w=925 925w, https://media.dealstreetasia.com/uploads/2016/04/APAC-PE-Inv-Value.jpg?resize=768,465 768w" sizes="(max-width: 925px) 100vw, 925px" />
Also read:
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/36561-36561/" target="_blank">PE buyouts to make up majority of portfolios in coming years: Bain &amp; Co</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/private-equity-in-asean-fighting-limited-pool-of-attractive-targets-fragmented-markets-bain-company-7201/" target="_blank">Private Equity in ASEAN fighting limited pool of attractive targets, fragmented markets: Bain &amp; Co</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/apac-pe-outlook-2015-bain-co-4892/" target="_blank">APAC PE activity to remain strong &amp; sustainable in 2015: Bain &amp; Co</a>
<a style="color: #ff0000;" href="http://www.dealstreetasia.com/stories/apac-robust-energy-mas-2015-eversheds-mergermarket-34029/" target="_blank">APAC most robust for energy M&amp;As in 2015: Eversheds, Mergermarket</a>

APAC PE's stellar momentum in 2015, unlikely to sustain this year: Bain & Co

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