Private equity sees strong rebound in deal activity across Southeast Asia in Q2 2024

• US$5.6b was deployed across 28 PE-backed deals in Q2 2024, up from US$586m from 17 PE-backed deals in Q1 2024
• Infrastructure deals accounted for 78% of PE investments, followed by real estate (12%) and technology (4%)
• PE-backed exits in SEA saw an uptick with US$1.1b from nine deals, compared with US$255m from four deals in Q1 2024

Private equity (PE) activity in Southeast Asia (SEA) had a strong rebound in the second quarter of 2024, up 10-fold in deal value and 1.6 times in deal volume, compared with the previous quarter. In Q2 2024, there were a total of 28 deals deploying US$5.6b across SEA, compared with 17 deals deploying US$586m in Q1 2024. 

Infrastructure deals accounted for more than three-quarters (78%) of PE investments by value, followed by real estate (12%) and technology (4%). Singapore and Malaysia contributed to the majority of deals, representing some 92% of the total PE deal value and about 57% in PE deal volume in Q2 2024.

This is according to the EY Quarterly Private Equity Update: Asean (Q2 2024), which provides a quarterly roundup of the PE deals along with capital activities across major sectors in Southeast Asia.

Luke Pais, EY Asia-Pacific Private Equity Leader, says:
“As expected, PE activity in SEA continues to gain momentum. 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.”

Uptick in exit activity and fundraising activity

For exits, Q1 2024 saw an uptick in activity with nine PE-backed exits valued at US$1.1b, compared with four exits valued at US$255m in Q1 2024. PE secondaries are expected to become a popular exit route in SEA, as investors increasingly explore liquidity options, including general partner (GP)-led secondaries, platforms and continuation funds.

In fundraising, there were two PE fund closes in Q2 2024 in SEA, raising a cumulative capital of US$5.4b, compared with two funds that raised US$574m in the previous quarter. As well, PE deals accounted for 16% of overall M&A deal volume in SEA in Q2 2024, compared with 9% in Q1 2024.

Pais concludes:

“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 PE sponsors and infrastructure financing solutions are other key areas of private credit deployment.”

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