Asian private equity investors have had a good ride, but the outlook is dimming

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Asian private equity investors have had a good ride, but the outlook is dimming
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The outlook for Asia Pacific private equity deal making is becoming increasingly gloomy, according to Bain & Company.

The outlook for Asia Pacific private equity deal making is growing increasingly gloomy, according to Bain & Company.

The Chinese new economy is commonly defined as companies riding the wave of the expanding mobile internet, such as online shopping platforms and other web-based services including ride-hailing, food delivery and online financial services. But while 2018 was a record-breaking year in the region — in terms of the value of deals, which hit $165 billion — overall fundraising declined more than 50 percent to $75 billion, Bain said.

Last year, exit values in Asia Pacific hit a record high — but the total number of exits declined sharply, even as larger deals dominated. An exit in this case is when a private equity firm leaves an investment position by selling a business or a stake in a company in which it's invested. "With the risk of global recession and other macro-economic challenges, we expect the market for exits will only get tougher," Yang said.

"The huge volume of private equity and venture capital flowing into China's new economy has over­-saturated the lower end of the market, prompting investors to seek larger investments," the report said.

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