Asia Pacific Private Equity 2025 Almanac

Asia Pacific’s private equity (PE) landscape has experienced a significant rebound in 2024, fueled by evolving investment strategies and emerging market trends. In 2024, PE buyout investments in the region reached US$138 billion, marking an 8.1% increase from 2023 and the second-best year for PE dealmaking over the past decade. This renewed momentum has instilled optimism among General Partners (GPs) and investors, setting the stage for an active 2025. Despite ongoing geopolitical shifts and economic volatility, the report highlights that M&A activity, geographic realignment, and operational efficiency will shape the PE landscape in the year ahead.

Key insights

• Strong momentum with solid quarter on quarter growth in PE buyout activities throughout 2024.
• Shifting regional focus for new investments as well as exits with a strong bid from strategic buyers.
• Large and small deals dominated, while mid-sized secondary trades are expected to rebound in 2025.
• Consumer, TMT, and Industrials sectors saw the most investment.

Market themes:

Narrowing valuation gap and falling interest rates

Clarity on falling interest rates and lower PE exit valuations may give GPs greater confidence to pursue new deals in the coming year. Greater market activity could feed off itself, leading to a rapid acceleration in deal making and a rebound in mid-sized secondary trades that were relatively suppressed in 2023 and 2024.

We continue to see a focus on big deals and bolt-ons in the absence of deal flow

The largest 2% of deals (by deal count), which typically account for about a third of market value, accounted for 42% of overall deal values in 2024. On the flip side, PEs continued to invest in smaller deals and bolt-ons to existing holdings. Mid-sized deals were relatively scarce.

Geographic splits and realignment

PE funds are going through a period of geographic rebalancing, including PE portfolio companies pursuing a strategy of geo splits – restructuring their portfolio along geographical lines to optimise business operations and attract potential buyers.

A rise in exits to corporates

With less of a push to sell in order to raise new money from Limited Partners (LPs), many GPs chose to delay or postpone exits in 2024; however, exits to corporates were up.

Looking forward

The Asia Pacific fund landscape will consolidate and converge

The Asia Pacific PE fund landscape is both maturing and morphing, with convergence into fewer, larger funds and a corresponding expansion of fund operations in the region. A transition from growth-oriented investment to operation-oriented buyouts is also apparent and will drive GPs to expand their in-house operational capabilities.

Emergence of the ‘zombie‘ fund

Some small and mid-cap funds will enter a state of suspension as managers, seeing little hope of raising a new fund, will have a reduced incentive to exit investments, choosing to hold onto assets in the hopes of higher valuations in the future.

2025 looks set to be a year of growth, albeit one that may have to contend with shocks and volatility originating outside the region

Corporate confidence will fuel optimism and drive dealmaking, which may in turn fuel greater confidence for PE funds to sell portfolio assets.

Get in touch to discuss the findings in the Private Equity Almanac or to be connected with our Private Equity team at Deloitte.