Singapore leads deal activity in SE Asia – EY report

Investors continue to bet on higher economic growth, rising investment in technology and growing middle class in the region.

Singapore recorded the bulk of private equity and venture investment activity in South-East Asia in the second quarter of this year, contributing $739 million of the $1.3 billion worth of deals.

Deals in Malaysia made up 26 percent and Indonesia contributed 14 percent, according to Private Equity Briefing: Southeast Asia published by EY in September.

In Singapore, Standard Chartered Private Equity and Ng San Tiong acquired crane supplier Tat Long Holdings in June for $312 million and a consortium of investors that includes Rakuten Ventures, 500 Startups Management and Sequoia Capital India Advisors acquired consumer-to-consumer marketplace Carousell for $85 million in May.

Two of the largest investments for the quarter were made by CVC Capital Partners – $250 million for Malaysian snack food manufacturer Munchy’s Group and $150 million for Indonesian snack maker PT Garudafood Putra Putri Jaya.

Excluding large-cap deals, the aggregate investment in small- and mid-cap deals in the second quarter rose by 87 percent year-on-year, from $709 million to $1.3 billion as investors continue to bet on higher economic growth, rising investment in technology and growing middle class in the region, the report noted.

Consumer products and retail made up 30 percent of all private equity and venture capital investments for the quarter, while technology accounted for 25 percent.

Six South-East Asia-focused PE and VC funds reached their final close in the second quarter, raising an aggregate $942 million. Two examples are Dymon Asia Private Equity, which raised $450 million for its second fund in May and Korea Investment Partners, which raised $264 million for NPS Re-up Fund in the same month.

Total fundraising for the quarter is slightly lower than the 11 funds closed in Q2 last year, which raised $1.4 billion. The average size of funds closed had a 24 percent increase, rising from $127 million in Q2 2017 to $157 million in the second quarter.