Asian PE deal activity hits six-month low

Private equity deals and exits in Asia saw a significant drop in value during November as competition from strategics stunts dealflow.

Asia-Pacific experienced its slowest month in terms of deal activity during the second half of the year so far, according to a recent report from S&P Capital IQ. The report identified increased competition from strategic buyers as the main reason for the decline. 

Both the number and value of deals region-wide continued on a downward trend, totalling only $1.1 billion across 37 deals – a sharp 70 percent fall from the $3.6 billion invested across 44 deals in October and only a fraction of the $7.8 billion invested across 61 deals in August, the most active month in the second half.

Hong Kong and Southeast Asia experienced almost no dealflow, according to S&P data. In Australia, China, Singapore and South Korea, $461 million, $302 million, $165 million and $38 million was invested in each country respectively.

“In China, an overdependence on pre-IPO investment means the market is likely to be negatively impacted by the weak IPO market,” the study analysis explained. “No early recovery is expected here, as escalating accounting standards disagreements between the US and China add to uncertainty.”

The value of venture capital investments also hit a six-month low in November, falling 70 percent to $470 million across 49 deals as compared to $1.6 billion invested across 58 deals in October, according to S&P.