Private equity-backed deal value in Asia-Pacific excluding Japan soared 55.1% year over year in the second quarter to total $30.29 billion, according to S&P Global Market Intelligence data.
Domestic demand has driven corporate expansion and attracted private equity investment, said Jessie Juan, founder and partner at Quantium, a Singapore-based software platform for private equity fund and portfolio analytics.
The China factor
While deal value increased, deal volume has trended down for the past three quarters. This is in part due to prolonged lockdowns and policy issues in China, Asia-Pacific's growth engine, according to Cate Ambrose, CEO of Global Private Capital Association, formerly EMPEA, an organization representing private capital investors in emerging markets.
China continues to block U.S. regulators from inspecting auditing firms in China, risking delistings of Chinese companies in the U.S. Other headwinds include increased scrutiny of technology sector investment and the recent geopolitical tensions with the U.S. concerning Taiwan. More privatizations of U.S.-listed Chinese technology companies could follow due to regulatory shifts in the U.S. and China, Ambrose said.
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Technology, clean energy and healthcare remain the sectors of choice in the region for global investors, Quantium's Juan said.
In the year-to-date, the region's largest announced private equity-backed deal is the $21.38 billion acquisition of Australian hospital owner and operator Ramsay Health Care Ltd. by a consortium led by KKR & Co. Inc.
China-based IT components manufacturer Tsinghua Unigroup Co. Ltd.'s $8.17 billion proposed acquisition by a group including Beijing JianGuang Asset Management Co. Ltd., Beijing Wise Road Asset Management Co. Ltd. and Beijing Zhiguangxin Holding Co. Ltd. is the second-largest deal in the region, followed in third place by Stockholm-based EQT AB (publ)'s $7.45 billion proposed acquisition of Hong Kong-based Baring Private Equity Asia.