Private equity briefing: Southeast Asia – November 2017

A roundup of private equity deals and capital activities in the quarter as well as trends that are shaping investment decisions today

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2Q17 private equity (PE) deal activity declined, however PE interest levels and dry powder remain high in the region.

The overall value of PE deals completed in 2Q17 across Southeast Asia was US$1.23b across the 24 deals closed. The quarter’s activity had slipped from the previous quarter, which saw total deal values at US$1.97b across 28 deals. Singapore deals accounted for approximately 50% of the PE activity in 2Q17, led by the US$550m fund raising by SEA Limited (formerly known as Garena Interactive Holding Ltd).

In this issue, we share our approach on value creation though operational transformation. This has become ever more important given the entry multiples and relatively sluggish business environment in the region over the last few years. We believe this will be a significant lever for PE returns over the next cycle.

We also feature Malaysia as the “country in focus” for this issue of the newsletter. Malaysia has been exhibiting solid fundamentals as a market to become a PE dealmaking hotspot. Despite challenges affecting the region and country-specific issues, Malaysia-related M&A activity was still resilient in 2016. We believe there is value to be had in this market and a number of hidden gems.