New Deloitte Report: Asia Pacific Private Equity Almanac Reveals Strong Market Recovery and Shifting Investment Trends

Hong Kong, 24 February 2025 - Deloitte Private Equity Asia Pacific's team has published their latest Asia Pacific Private Equity 2025 Almanac which highlights a significant rebound in Private Equity (PE) activity since 2024, evolving investment strategies, and emerging market trends across the region. Asia Pacific PE buyout investments reached US$138 billion in 2024, an 8.1% increase from 2023, marking the second-best year for PE dealmaking over the past decade.

With such capital deployed, there is a growing sense of optimism among General Partners (GPs) and the broader market for a very active 2025 amidst contending with exogenous shocks and volatility originating outside the region. Despite these momentary shocks, PE activity is expected to maintain its robust upward trajectory with 2025 set to be a year of growth.

Key findings from the report:

• Accelerating momentum in M&A deals: Increased M&A volumes will lift PE investor sentiment and lead to more PE transactions. Rising deal volume will lead to a rapid acceleration in deal making and drive a rebound in mid-cap secondary trades that were relatively suppressed in 2023 and 2024.
• Geographic Realignment: Surprisingly, China and Australia took the lead in the largest share of PE investments, but India and Japan continue to be viewed as attractive markets. At the same time, some sovereign wealth funds from the Middle East began to ramp up their Asia Pacific operations, including significant investments into China.
• Geo Splits: Amid this geographic rebalancing, PE portfolio companies and corporates pursued a strategy of geo splits – restructuring their portfolio along geographical lines to optimise business operations and attract potential buyers.
• Rise of “Zombie” Funds: Lower fundraising prospects and the consolidation of funds will also mean more small and mid-cap funds will close in the coming years, and we will see the emergence of so-called “zombie funds” – funds that continue for a prolonged period with little to no activity, looking for an exit and tying up capital from other, more productive investments.
• Expanding Operation teams: GPs are likely to build out their in-house capabilities, taking on more specialised operational professionals to assess and roll-out value creation plans. Areas they are likely to focus will include finance and operational efficiency, cost optimisation, digital and cloud adoption, and regulatory non-financial disclosures.
• Hot Sectors: Consumer, TMT, and industrial sectors were the primary focus of PEs in 2024, with consumer leading the sector activity at 223 deals, followed by TMT with 221 deals and industrials with 155 deals.

Commenting on the report Sam Padgett, Deloitte Asia Pacific’s Private Equity Origination Leader said, "2024 was a year when statistics told a different story from the sentiment felt within the PE market in Asia. The numbers painted a picture of strong market activity, yet the sentiment on the ground told a different, more complicated story. It felt like a year of recovery, rerouting and realignment. The pandemic's long-term effects and recent geopolitical shifts have reshaped our industry.”

“As we enter 2025, market participants are coming to terms with the new normal in the PE landscape, and there's a palpable sense of growing momentum and optimism. All signs point to 2025 being a dynamic and eventful year for private equity in Asia Pacific, albeit one that may have to contend with shocks and volatility originating both inside and outside the region,” he added.

To access the full report and learn more about the findings, please visit https://www.deloitte.com/global/en/offices/apac/perspectives/2025-asia-pacific-private-equity-almanac.html.

Methodology

Private Equity, by its very nature, can be an opaque arena, certainly when compared to other spheres of investment, and establishing a single, verifiable source of truth poses real challenges: different players provide information – when they provide it at all – in different formats and using different metrics.

The Deloitte Asia Pacific Private Equity Almanac attempts to overcome many of the shortcomings of this incomplete data to provide the most insightful view possible of the buyout market. It reflects commentary and market insights based on our close coverage of the market throughout the year. Trends and statistics are checked against and supported by Deloitte's proprietary database of portfolio holdings for PE funds in Asia.

The scope of the Almanac is limited to buyout PE funds and their transactions (i.e. traditional buyout funds, focused on control deals), and as such, transactions deemed to be made by venture, growth, infrastructure, or real estate funds have not been included. Its geographic coverage spans PE activity across the entire Asia Pacific region: Greater China, India, Japan, South Korea, Australia and New Zealand and Southeast Asia; and deals done in the rest of world by Asia Pacific -based PE funds.

Our aim has been to provide what we believe is as rigorous and complete a view as is possible on the Asia Pacific buyout market – a market that is notoriously difficult to track in a holistic and accurate manner. With the Deloitte Asia Pacific Private Equity Almanac, we are providing a valuable tool for industry participants to better understand the market as a whole – qualitatively and quantitatively – and make better-informed decisions.