Asia PE fundraising falls 28% in 2019

Pan-regional managers raised $18.2 billion, down from $57.2 billion in 2018. Put another way – and if renminbi-denominated vehicles are excluded – their share of overall fundraising fell from 50% to 28%. This is largely a function of which PE firms happen to be in the market. The number of pan-Asian funds achieving final closes of $4.5 billion or more went from five in 2018 to just two last year. However, several large-cap players are currently in the market, so the situation could turn on its head in 2020.

Venture fundraising – once again, excluding the renminbi segment – fell to $15.4 billion, from a record $25.5 billion the previous year. It comes amidst a correction in valuations at most stages of the market, a crisis of confidence regarding late-stage funding rounds, and concerns that trade tensions between the US and China are moving into the technology space.

Commitments to country-focused funds – minus venture capital increased from $59.2 billion to $71.8 billion. They accounted for eight of the 10 largest final closes, with the likes of Boyu Capital, Primavera Capital, CITIC Capital, DCP Capital Partners and Centurium Capital all raising $2 billion or more for China funds. In 2018, seven of the top 10 final closes were pan-regional.

Private equity investment reached $164 billion in 2019, down on the previous two years but still the second-highest total on record. There was a drop-off in buyout activity, which fell from $59.2 billion to $40.1 billion. While the number of billion-dollar-plus transactions was largely unchanged – it dropped from 14 to 12 – there were no mega-deals. Only one investment, Brookfield Asset Management’s acquisition of Healthscope in Australia, crossed the $3 billion threshold.

Growth investment slipped from an all-time high of $103.3 billion in 2018 to $84.2 billion, which was almost entirely due to the seizing up of late-stage funding for technology companies – specifically in China. Nearly $40 billion was pumped into 15 tech transactions of $1 billion or more in 2018. In 2019, the total was $10.3 billion across five deals.

Coming off a record $122.8 billion in 2018, exits plummeted to $71.4 billion, the lowest total in four years. The trade sale contribution slipped from $100.4 billion to $65.5 billion, with 18 deals topping $1 billion compared to 27 in 2018. The number of trade sales in excess of $3 billion fell from five to two.

Public market volatility also spooked investors, with sell-downs and block trades falling from $8.6 billion to $2.8 billion, an 11-year low. There were 155 PE-backed IPOs that generated cumulative proceeds of $24.7 billion, down from 189 and $48.6 billion in 2018. It was the slowest year since 2013.

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• Topics
• Fundraising
• Investments
• Buyouts
• Expansion
• Trade sale
• IPO
• Exits
• Asia