KPMG – APAC PE Barometer, 2023

The Asia-Pacific (APAC) region experienced a surge in private equity (PE) investments in 2020-21, driven by factors such as abundant liquidity, low interest rates, digital acceleration, and pandemic-induced opportunities. However, recent data shows that this momentum has significantly decreased, with total investment value dropping by 36% to US$84.7 billion in the first half of 2023, compared to US$132.3 billion in the same period last year. Several challenges have contributed to this trend, including an overheated market, widening gaps in valuation expectations between buyers and sellers, rising interest rates and inflation, and uncertainties at the global and regional levels. Slowing deal activity has prevented PE funds from generating exits and making distributions to investors. Despite these challenges, confidence in the APAC PE market remains strong. The region's maturing markets, vast growth opportunities, expanding middle class, and rising capital under management indicate continued interest and potential for outsized returns. The slowdown in activity is seen as a recalibration rather than a lack of opportunities. Overall, the APAC PE industry remains resilient and capable of navigating market complexities.