Deal activity in Southeast Asia gains momentum on the back of megadeals

• US$9.2b was deployed across 19 PE-backed deals in Q1 2026, making it the highest quarter by deal value over the past five years
• Three megadeals (deals above US$1b) accounted for 91% of total capital deployed
• PE-backed exits were valued at US$1.7b across six deals

Southeast Asia (SEA) saw a strong start in private equity (PE) investment in the first quarter of 2026. There were 19 PE-backed investments worth US$9.2b, compared with 14 deals worth US$2b in Q1 2025. Overall, deal value surged 2.5 times year-on-year (yoy), while deal volume increased by 36% over the same period.

SEA accounted for approximately 17% of total PE deal value in Asia-Pacific. Singapore remained SEA’s primary hub for PE activity, accounting for 94% of deal value and 68% of deal volume across the region.

This is according to the EY-Parthenon Southeast Asia Private Equity Pulse (Q1 2026), which provides a roundup of PE deals along with capital activities across major sectors in the region in the period of January to March 2026.

In Q1 2026, robust PE deal activity was driven by global investors executing megadeals in the region, particularly within the digital infrastructure space. Beyond infrastructure (77%), consumer (14%) and technology (7%) were the next most active sectors. The outsized share of infrastructure deals was anchored by two megadeals in the data center segment. Investor appetite for digital infrastructure continues to intensify, underpinned by hyperscaler expansion, rising AI-driven compute demand, data localization mandates, and the significant opportunity to scale power and connectivity assets across SEA’s structurally underpenetrated markets.

The region recorded six exits generating US$1.7b in realized proceeds. Aggregate exit value increased by 75% yoy, while exit volume remained unchanged.

Luke Pais, EY-Parthenon Asean Private Equity Leader, says:

“SEA seems firmly back in deal‑making mode. Despite macroeconomic headwinds, investment momentum is strong, with capital flowing across sectors. Crucially, exits are gaining traction, restoring confidence and liquidity to the system. This dynamic creates a powerful flywheel that is likely to drive a more active investment and realization environment in the coming years.

Fundraising in SEA remained muted in Q1 2026, reflecting a more measured approach from limited partners (LPs) amid a sharp global slowdown, as heightened uncertainty across global markets and the impact of the situation in the Middle East continue to weigh on investor sentiment.”

Macroeconomic volatility cited as leading risk to PE portfolio

Fifty-six percent of general partners (GPs) surveyed in the EY Global Private Equity Pulse Survey (Q1 2026) cited geopolitical and macroeconomic volatility as the biggest risk to portfolio performance over the next 12 to 24 months. The next most significant risks indicated were a prolonged slowdown in exit activity (48%) and persistently high interest rates as well as financing costs (32%).

The survey highlighted three fund and portfolio imperatives that GPs should consider:

• Reassess exit strategies: adjust sale processes and exit timelines to reflect asset-level exposure to geopolitical risk, valuation sensitivity and buyer risk appetite
• Strengthen portfolio resilience and risk management: assess the impact of higher energy costs, inflation and tighter financing
• Deploy capital selectively: stay alert to dislocation-driven opportunities, such as secondaries and special situations, while maintaining disciplined underwriting

Pais concludes:

“The current economic environment underscores the importance of disciplined capital deployment and active value creation. Sponsors that can effectively manage cost pressures and build operational resilience across portfolios would be better positioned to unlock liquidity, capitalize on acquisition or bolt on opportunities and generate returns as market conditions normalize.”

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