By Preqin
Fundraising and buyout deal activity falls sharply, but venture capital maintains momentum
Preqin's latest report on the private equity industry in Asia finds that in 2016 YTD there has been a steep decline in activity from the record levels seen in 2015. Fundraising has fallen in all regions, and the aggregate capital raised by Asia-based private equity firms is just $19bn in 2016 YTD, significantly below the total seen in 2015 ($47bn). China-based funds, which have long been the driving force behind the private equity market in Asia, have secured $12bn so far this year, well down on the $32bn and $34bn raised in 2014 and 2015 respectively. Similarly, South Asia-based fundraising is yet to surpass $0.3bn in 2016 YTD, despite raising $3bn last year. The same trend can be seen in private equity-backed buyout deal activity; aggregate deal value in 2016 so far is just $12bn, less than a quarter of the record $52bn deal value recorded in 2015. Deal value in China has seen the biggest decline, from $31bn in 2015 to $5bn this year, while in ASEAN countries aggregate deal value has fallen from $4bn last year to $0.7bn in 2016.
Although fundraising has fallen, venture capital activity in the region has maintained its momentum. Asia has recorded 2,174 deals so far in 2016, worth a combined $42bn; this is on course to match the record seen in 2015, when there were 3,651 deals recorded worth a combined $52bn. Venture capital deal value ASEAN countries has already broken 2015's record, with $2bn in deals already recorded, up from $1.4bn last year. China also looks set to maintain its upward trajectory, with the combined value of deals recorded in 2016 YTD ($36bn) already nearing the all-time high seen in 2015 ($39bn). By contrast, India has seen a slowdown in activity, with 60 deals announced worth $3bn, well short of the $7bn recorded in 2015.
Other Key Private Equity and Venture Capital in Asia Facts:
