Asia-Pacific Private Equity Shows Signs of Recovery Amid Fundraising Woes

What's New

Asia-Pacific private equity markets showed tentative recovery signs in 2024, with deal value increasing 11% while fundraising plunged to a 10-year low, according to Bain & Company's Asia-Pacific Private Equity Report 2025. India emerged as the region's star performer, recording double-digit growth in both deal value and count.

Why It Matters

The divergent performance across markets signals a fundamental shift in investor priorities, with capital flowing away from China (dropping to 27% of regional deal value from over 50% in 2020) toward India and Japan. This reallocation reflects changing risk assessments and growth expectations across the region's economies.

Big Picture Drivers

• Control is increasingly prioritized, with buyouts growing to over 50% of deals as investors seek greater influence amid uncertainty.

• Diversification away from technology investments (down to 25% from 50% in 2018) toward more resilient sectors like communications, media, and financial services.

• Competition continues to consolidate, with active investors declining 10% to 2,412 while top 20 funds maintained 41% of deal value.

• Value creation has become imperative as multiple expansion opportunities diminish, with 53% of GPs citing top-line growth as key to returns.

• Carve-outs remain attractive despite diminished returns, representing 20% of buyouts over $100 million in 2024.

By The Numbers

• 11%: Increase in Asia-Pacific deal value in 2024

• 22%: Decline in fundraising to a 10-year low of $74 billion

• 26%: Percentage of 2017-19 vintage buyouts exited by year five (vs. 43% for 2011-13 vintages)

• 87%: Fund managers expecting returns to maintain or improve over next 3-5 years

• 20%: Share of corporate carve-outs among buyout deals over $100 million

Key Trends to Watch

• Secondary exits have become the largest exit channel by value, overtaking IPOs as funds seek to accelerate distributions and improve liquidity.

• Portfolio management capabilities are being strengthened as nearly 50% of GPs admit failing to meet growth expectations in more than half their deals.

• Pan-Asia funds continue gaining share (reaching nearly 60% in 2024, up from 36% in 2019) as investors seek to reduce market-specific risks.

• India and Japan are attracting increased allocation from global fund managers, with major players like Carlyle and Bain Capital significantly boosting their India exposure.

The Wrap

As multiple expansion opportunities fade, PE firms must master value creation through operational improvements and strategic growth initiatives. Successful firms are developing stronger portfolio management capabilities, creating clear value creation plans, and making tough decisions earlier—particularly for complex transactions like carve-outs.