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China dominates Asia deal flow in H1 2017

Deals in emerging Asia reached $15bn in the first half of 2017, the highest half-year total on record, data from EMPEA show.

Big ticket deals in China exceeding $300 million dominated the investment landscape in the first half the year, reflecting the maturity of the private capital market in the country, according to data from the Emerging Markets Private Equity Association (EMPEA).

China dwarfed South Korea, India and South-East Asia with $8.4 billion worth of private equity deals. India and South Korea recorded deals totalling $2.9 billion each from January to June. Meanwhile general partners in South-East Asia only deployed $896 million, a 51 percent drop from the same period last year, showing an “inconsistency in investor outlook for the region”, partly due to the struggle in conveying a cohesive regional story, the report noted.

Overall, general partners focused on emerging Asia deployed $15 billion in the first half of 2017, the highest half-year total on record. Thirteen deals exceeding $300 million in size across growth, buyout, private investment in public equity and venture capital strategies were completed during the period.

According to EMPEA, PAG’s $1.4 billion acquisition of Yingde Gases boosted buyout totals, while consortium investments in on-demand service platform Koubei and bike-sharing company Ofo led growth and venture capital investments, respectively. The consumer services sector attracted $3.6 billion in H1 2017, the highest half-year total for the industry on record.

In addition, capital invested and aggregate fundraising both increased in 1H 2017 compared with the same period last year. Investments in emerging Asia rose by 45 percent, while fundraising increased by 29 percent boosted by KKR’s Asian Fund III which closed on $9.3 billion in commitments in June. The fund accounted for more than 56 percent of the $17 billion raised for emerging Asia.