Southeast Asia has seen record levels of private equity and venture capital investment activity in 2018, according to the accounting and professional services firm, Ernst & Young (EY).
In the second quarter of this year 36 private equity deals were closed, with investments totalling $1.3 billion (€1.4 billion). This represents a considerable rise from the same time last year where aggregate investments stood at $709 million, as investors continue to bet on higher economic growth, further investment in technology and a growing middle class, EY said.
Singapore led the pack and generated the most interest from private equity and venture capital investors, which accounted for 56% of deals in 2Q 2018. Malaysia trailed with 26% while Indonesia contributed 14%.
Most of the investments were directed towards the consumer products and retail (30%) and technology (25%) sectors and the latter “will remain a high priority sector in the region,” the report said.
Private equity exits saw a sharp drop in 2Q 2018 with four deals valued at $443 million – a 28% drop from a year ago. As a number of private equity assets near the end of their investment life, EY is forecasting healthy exit activity over the next year.
“We expect the momentum in deal activity to continue for the rest of the year,” the firm said
“Private equity fundraising remained robust despite being lower than the record levels in previous years. There were six Asia-Pacific domiciled private equity and venture capital funds with a focus on Southeast Asia that reached their final close, raising an aggregate $942 million compared with 11 funds closed in 2Q 2017 raising an aggregate $1.4 billion.”
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