Asia Pacific Private Equity 2024 Almanac
Private Equity (PE) plays a pivotal role in the health and growth of economies around the world, and nowhere more so than in Asia Pacific. The share of PE dry powder in Asia Pacific is disproportionately large relative to the region’s PE volumes: Asia Pacific PE dry powder is 23.7% of the global total whereas Asia Pacific PE deals only accounted for 15.2% of global PE deals in 2023 – a clear indication of the increasing momentum of PE capital deployment in the region.
Deloitte is deeply committed to supporting the industry and enjoys a privileged position as a trusted value creation advisor across the end-to-end PE ownership cycle to many of the leading participants in the market – be it deal origination and due diligence or operational consulting through to fund valuations and audits. This exposure and our extensive experience across the sector put us in a strong position to develop unique insights and perspectives on the market and to provide analysis and commentary on market trends and trajectories.
Our aim in producing this Almanac is to provide both a detailed and comprehensive picture of PE activity across Asia Pacific in 2023, and an analysis of the overarching themes that emerged. We have striven to present those trends within the context of recent market history and have also cast our gaze into the future to explore some of the likely trends and influences that we believe will drive activity in the coming year.
Key points of Asia Pacific Private Equity 2024 Almanac
With many deal processes foundering on this handicap, PE funds are employing softer but slower approaches to asset sales – and different kinds of deals – to avoid the practical difficulties and negative perceptions that accompany a failed process. These dynamics may favour both strategic sellers, for whom price is not the only concern, and strategic buyers, who often require more time to complete a deal. Meanwhile, PE buyers, can make use of less stringent process timelines to explore creative structuring to help bridge the persistent bid-ask valuation gap with sellers, such as partial deals with earn-outs, synergies with existing portfolio, or hybrid debt/equity solutions.
In the face of low transaction volumes and the challenge in achieving satisfactory exit valuations, PE funds are increasingly focusing on driving value through operational improvement and funding dividends via more ambiguous liquidity strategies including continuation funds, partial exits, and strip sales or portfolio sales to secondary funds or fund-of-funds.
We hope you find this both useful and thought-provoking and would welcome the opportunity to contact us to discuss our findings and perspectives in more detail.
