Private equity continues M&A rebound across Southeast Asia

Deal activity by private equity groups in Southeast Asia enjoyed a strong rebound in the second quarter of 2024, up 10-fold in deal value and 1.6 times in deal volume, according to research from EY.

In Q2 2024, Southeast Asia saw a total of 28 deals closed by financial sponsors, up from 17 deals the previous quarter, and up from 9 in the same period in 2023. Notably, deal value grew strongly to $5.6 billion.

Singapore and Malaysia contributed to the majority of deals in Q2 2024, representing some 92% of the total private equity deal value and about 57% in private equity deal volume.

From a sector perspective, infrastructure deals accounted for more than three-quarters (78%) of private equity investments by value, followed by real estate (12%) and technology (4%).

“As expected, private equity activity in SEA continues to gain momentum,” said Luke Pais, Asia-Pacific Private Equity Leader at EY. “New investments as well as exit activity will continue to build up in the months ahead and we expect deal activity to be more broad based. Moderation in interest rates should further strengthen deal activity.”

One metric that can predict future deal activity is fundraising. In Q2 of 2024, there were two fund closes, raising a cumulative capital of $5.4 billion, compared with two funds that raised of $574m in the previous quarter.

“We believe that Asia’s private credit looks poised for growth, driven by a growing need for alternative funding. Corporates are increasingly looking to private credit for liquidity solutions. Acquisition financing by private equity sponsors and infrastructure financing solutions are other key areas of private credit deployment.”