Buyout, growth and venture capital all saw fewer funds closed and less capital raised

The private equity market in Asia faltered in 2016, with both the number of funds closed and the total capital raised seeing its second consecutive annual decline. Preqin’s 2016 Fundraising Update found that 148 Asia-focused private equity funds raised a combined $40bn through the year, down from 214 funds that raised $51bn in 2015, and 226 funds that raised $65bn in 2014. Venture capital fundraising was broadly on par with previous years, but buyout fundraising fell by 21% from 2015, and growth fundraising fell by 58%.

Asia-Focused Private Equity

Other Key Asia Private Equity Findings:

  • Venture Capital: Despite slight declines in both fundraising and deal-making activity in the region, Asia continues to vie with North America as the most active venture capital market in the world. China, India and Japan are in the top five countries with the highest number of active fund managers, and China in particular has accounted for a growing proportion of global venture capital deal activity over recent years.
  • Buyouts: In the context of the global private equity buyout market, Asia has seen its significance decline in recent years. Funds focused on Asia accounted for just 7% of total buyout fundraising in 2016, its lowest share since 2012. Additionally, the total value of buyout-backed deals in the region fell by 55% compared to 2015, with 257 deals taking place worth a combined $24bn.
  • Investors: Asia has long been viewed as a key growth market for the private equity industry, and Preqin’s year-end investor surveys reflect this. The three regions most investors cited as presenting the best opportunities in 2017 were emerging Asia, China and India. However, despite the deceleration of economic growth in China and the Bank of Japan’s adoption of negative interest rates, parts of the continent are still only just starting to explore private equity investment: Asia-based investors account for just 13% of the global private equity investor universe at the start of 2017.

Article by Preqin