Asia's Private equity sales witnessed a steady decline of 44% in the year 2022. Additional delay is forward

March 29, 2023: Asia-Pacific’s private equity market plummeted in the previous year as investors’ appetite for risk decreased in the face of inflation and geopolitical issues, according to Bain & Company.

The international management and consulting firm said in a Tuesday report the total deal value for the region would decrease by 44% to $198 billion in 2022. The analysts said that compared to $354 billion in 2021, adding that almost 70% of surveyed fund managers expect a negative trend into 2024.

Lingering macroeconomic uncertainties alongside increasing costs and worsening company performance dampened investor sentiment, Bain stated in its Asia Pacific Private Equity Report 2023.

“Investors, sensing a recent era of slower growth, mounting inflation, and greater uncertainty, taking time to recalibrate their strategies, identified that what worked well in the previous may not be the right approach for the year 2023 and beyond,” a group of authors from Bain’s Private Equity practice which includes Kiki Yang said in the report.

“If the conditions of macroeconomic uncertainty, poor company performance, and a refusal in the deal activity that prevailed in 2022 persist, valuations may keep going to contract as fund managers adopt a wait-and-witness attitude,” Bain stated.

It said that deal value in Greater China fell by 53% as investors are grappling with the nation’s zero-Covid policy, leading to declines in the wider region. Bain said that China and India accounted for a decrease of $35 billion in the deal value for significant growth deals for the year.