Asia Pacific Private Equity Deal Value Hit Record High Despite Global Covid-19 Disruption

HONG KONG, March 25, 2021 /PRNewswire/ — Private equity (PE) investors in Asia Pacific braced for a difficult year in 2020 as two years of record investment in the region had ended in 2019 with a sharp decline in deal value, exits, and fund-raising. However, no one was prepared for Covid-19. Shocked by the fallout, investors recoiled at first but many quickly jumped back into the market, especially in China, India, and Japan, lifting deal value across the region to a record high of $185 billion, up 19% from 2019 and 23% over the previous five-year average.

The environment remains challenging: exits hovered close to a 10-year low and fundraising tumbled again. According to Bain’s 2021 Asia-Pacific private equity survey, conducted with 162 senior market practitioners, the top concerns for General Partners (GPs) surveyed include high valuations, increased competition and the ongoing impact of Covid-19.

These are among the findings from Bain & Company’s 2021 annual Asia-Pacific Private Equity Report, released today.

“It’s been a rollercoaster year for private equity in Asia,” said Kiki Yang, co-head of Bain & Company’s APAC Private Equity practice. “But while dealmaking ended the year on a high, Covid-19 has not gone away, and building portfolio resilience will be a crucial skill for leading investors.”


Dealmaking was the bright spot in 2020, reaching a fresh peak of $185 billion. After a sudden halt in the first quarter, activity picked up especially in China and India. This robust dealmaking helped Asia-Pacific assets under management rise to 28% of the global PE market.

China’s total deal value rose to $97 billion, up 42% from 2019 and 22% higher than the previous five-year average. Meanwhile, India continued to increase its share of deal activity in the region. Deal value rose to $38 billion, up 64% over the prior five-year period. The growth came partly from an extraordinary series of 10 private equity investments totaling almost $10 billion in technology multinational Jio Platforms, and seven investments in Reliance Retail.

While deal value grew in Japan and Australia–New Zealand from the previous five-year averages, South Korea’s deal activity was on par with previous years. Travel restrictions affected deal activity significantly in Southeast Asia, where deal value declined 16% over the previous five-year average.

Throughout the region, investors are targeting fast-growing companies with digital business models and platforms that were boosted by the switch to virtual work, education, and retailing. These digitally accelerated sectors include e-commerce, e-learning, digital healthcare, online booking services, online entertainment, and digital payments and financial services.


Following a breathtaking fall to a 10-year low in 2019, the number of exits was flat last year.  Exit deal value totaled $70 billion, down 24% year-on-year and 40% from the previous five-year average, as PE managers waited for better times to sell portfolio companies. Of the GPs we surveyed, more than 70% of GPs surveyed say the exit environment was more challenging than in 2019, pointing to Covid-19 as the principal cause for a weak exit environment.

One bright spot was the initial public offering (IPO) exit channel. IPOs dominated the exit market, making up more than 60% of exits by value, almost double the previous five-year average. China accounted for 86% of the region’s IPOs and the majority were healthcare and technology companies.

The value of the companies held in PE portfolios, or unrealized value, continued to climb, reaching $1.04 trillion, up 33% year-on-year. GPs’ inclination to wait for better exit conditions has created an exit over­hang, which will increase pressure on fund managers to accelerate exits in coming years.


Fund-raising slowed in 2020, overshadowed by a poor exit environment. Funds focused on Asia-Pacific raised $90 billion, down 32% year-on-year, 53% from the prior five-year average, and 64% from the peak year of 2017. The number of funds that closed fell to 356, down 76% from the 2017 peak. By contrast, global PE fund-raising declined only 11%. Asia-Pacific’s sharper decline pushed down the share of purely Asia-Pacific-focused funds as a percentage of the global total to 12%.

Despite the sharp drop in fund-raising, dry powder reached another new high as market uncertainty and high valuations kept some investors on the sidelines. Total unspent private equity capital at Asia-Pacific-focused funds rose 22% to a record $477 billion. This represents 3.2 years of future investment, up from 2.7 years in 2019.

Asia-Pacific fund-raising is likely to bounce back in 2021, as efforts delayed last year move ahead. However, the coming years may see a geographic shift in the LP base. More than 30% of GPs in the region expect such a change, according to our survey, including nearly half of China’s GPs.


Returns remained strong, and private equity again outperformed the region’s public markets by at least 3 percentage points across 5-, 10-, and 20-year horizons.

According to the survey, 60% of GPs surveyed say top-line growth will be the most important factor contributing to returns in the coming five years. Underscoring that conviction, 56% say they have a robust value-creation plan in place within the first six months of investment, including a short list of key initiatives for most of their portfolio companies. However, follow-through is the sticking point. Fewer than 30% say the majority of their management teams execute their value-creation plans successfully and deliver the intended results.

Nearly 20% of GPs say margin expansion or cost cutting would be the key factor in generating returns in the next five years, while 12% are counting on multiple expansion, down from 23% five years ago.

What’s ahead for 2021?

Looking forward, there is light on the horizon. Though GPs are concerned about the ongoing effects of Covid-19, nearly 80% expect the macroeconomic climate to be more favorable this year, given the approval of promising vaccines last December.

Key trends in 2021 and beyond:

  • Digital business models will accelerate: Amid the many disruptions and challenges industries faced in 2020, growth powered ahead almost unperturbed in one sector: digital businesses. Our survey found that Asia-Pacific GPs are most interested in investments in digital health, e-commerce, and e-learning.
  • Resilience will be a trait of winning investors: Resilience is key to survive and recover from sudden shocks. Many GPs discovered in the midst of the pandemic that their portfolios weren’t sufficiently resilient, more than 60% of Asia-Pacific GPs surveyed would be willing to invest at least 5% of short-term profits to improve resilience.

Asia-Pacific has been an exciting and dynamic region for any global private equity fund, ” said Andrea Campagnoli, a partner in Bain & Company’s Private Equity practice based in Singapore. “Improving macroeconomic conditions coupled with many exciting investment opportunities, especially in digitally advanced sectors, will continue to draw strong interest from investors.”

Editor’s note: To receive a copy of the report or arrange an interview, contact Nicholas Worley at or +852-2978-8830.

About Bain & Company

Bain & Company is a global consultancy that helps the world’s most ambitious change makers define the future.

Across 59 offices in 37 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise and insight to organizations tackling today’s urgent challenges in education, racial equity, social justice, economic development and the environment. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.

About Bain & Company’s Private Equity Practice 

Bain & Company is the leading consulting partner to the private equity (PE) industry and its stakeholders. PE consulting at Bain has grown sixfold over the past 15 years and now represents about one-third of the firm’s global business. We maintain a global network of more than 1,000 experienced professionals serving PE clients. Our practice is more than triple the size of the next largest consulting company serving PE firms. 

Bain’s work with PE firms spans fund types, including buyout, infrastructure, real estate and debt. We also work with hedge funds, as well as many of the most prominent institutional investors, including sovereign wealth funds, pension funds, endowments and family investment offices. Bain & Company supports its clients across a broad range of objectives that include deal generation, due diligence, immediate post-acquisition and ongoing value addition, exit planning, firm strategy and operations, and institutional investor strategy. 

Media Contact:
Nicholas Worley
Bain & Company
Tel: +852-2978-8830 


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