Private equity deal value in Asia-Pacific plunges 85%

Private equity and venture capital deal value and volume in Asia-Pacific, excluding Japan, plunged 85.4% in the first quarter to $1.20 billion, according to S&P Global Market Intelligence data.

Aggregate deal value in the first three months of 2023 stood at $8.24 billion. The number of deals also fell in the first quarter to 30 from 55 in the same period in 2023.

The first quarter results were the lowest totals of any quarter since at least 2021.

Capital deployment in Asia-Pacific was muted in the first quarter as the US Federal Reserve signaled that interest rates will likely remain higher for longer and a "wait-and-see" posture toward inflation data prevails. High interest rates and the uncertain direction of inflation create conditions that slow or delay the asset sale process, Sebastien Lamy, co-head for Asia-Pacific private equity practice at Bain & Co., told Market Intelligence.

Looking at annual totals, the value of private equity-backed investments in the region totaled $27.15 billion in 2023, the lowest amount since at least 2019.

First-quarter results suggest this year's total could be far lower than 2023.

– Download a spreadsheet with data in this story. – Read about 2023 private equity investments in Asia-Pacific, excluding Japan. – Explore more private equity coverage.

Overall M&A including private equity also fell, declining to $56.56 billion in the first quarter, down 51.1% year over year and representing the lowest quarterly total in the region since at least 2021.

As a percent of overall M&A, private equity transactions accounted for 2% in the quarter, compared with 7% of all deals a year ago.

Biggest deals

In the largest deal of the quarter, an investor group including Qingdao Guoxin Innovation Equity Investment Management Co. Ltd. agreed to buy a 67% stake in osteoporosis medicine and marine pharmaceutical company CP Pharmaceutical (Qingdao) Co. Ltd. for about 1.82 billion yuan.

The second-biggest deal was Adamantem Capital's nonbinding offer to buy QANTM Intellectual Property Ltd. for A$1.817 per share in cash.

The technology sector accounted for four of the top 10 deals in the first quarter.

As of May 7, US$1 was equivalent to 7.22 Chinese yuan.