Private equity fundraising in Asia fell to $100 billion in 2019 after hitting a peak of $188 billion in 2017, data from market research firm Preqin shows. In 2018, aggregate PE fundraising in the region amounted to $125 billion.
The number of funds that closed also fell by more than half from 1,203 in 2017 to 522 in 2018 and further to 276 in 2019.
Still, during the same period [2017-2019], PE interest in Asia continued to grow. The number of Asia-focused private equity funds in the market tripled from 467 in January 2018, to 1,223 in January 2019. By January 2020, however, the number of funds fell to 977.
In terms of PE-backed buyout deals, there were 406 transactions in 2017, slightly fewer than in the year before. But the aggregate deal value was 2.5 times more at $91 billion.
A notable deal in 2017 was the 2 trillion yen, or $18 billion, sale of Toshiba Memory, the Japanese conglomerate’s NAND flash chipmaker unit, to a consortium led by Bain Capital. Dell, Apple and South Korean chipmaker SK Hynix were among the other investors in the transaction that beat out competitors that reportedly included Western Digital.
Bain, which said it would improve Toshiba Memory’s operations, was already prepping the unit for a public listing last year, but the IPO has been delayed and is thought to take place this year.
There was also the privatisation of Singapore’s Global Logistic Properties from the stock exchange, which was completed in January 2018. The S$16 billion-buyout was backed by investors including Hillhouse Capital Management, China Vanke, and Bank of China.
Deal volume rose again in 2018 to 431 but aggregate deal value fell to $42 billion. In 2019, there were 363 deals done, worth an aggregate of $52 billion.
Globally, private equity markets, fundraising and dealmaking slowed in 2019 from the previous two years, although the industry still recorded robust figures.
In 2019, the 1316 private equity funds that closed secured $595 billion. This was lower than the record $628 billion raised in 2018. During the year, there were 5,103 PE-backed buyout deals that were announced, with an aggregate value of $393 billion. This was lower than the 6,481 deals that were announced, with a total value of $493 billion.
Dry powder, meanwhile, is at a record level of $1.43 trillion, more than double the $750 billion at the end of 2015.
Going into 2020, PE fundraising globally is likely going to be tough for some funds, Preqin said. There were already 3, 524 funds in the market at the start of the year, seeking a total of $926 billion. This, according to Preqin, is almost two years’ supply at 2019 fundraising levels, which suggests that some PE funds could struggle to secure funds.
Graphic: DealStreetAsia / Data: Preqin