A recent report by Bain & Company highlights a growing divide in the performance of Southeast Asia’s conglomerates, with top performers achieving 20% annual shareholder returns from 2016 to 2025. This marks a significant shift from the sector’s average of 4%, as these leading conglomerates close the gap with pure-play companies.
The report identifies two archetypes among the top performers: “all-weather stars” that have consistently delivered strong returns over two decades, and “emerging stars” that have rapidly ascended through bold transformations. Jean-Pierre Felenbok, a senior advisory partner at Bain & Company, noted, “A subset of leaders has proven that reinvention can unlock substantial value even in a lower-growth environment.”
The findings suggest that the underperformance of conglomerates is no longer inevitable but rather a matter of strategic choice and execution. The report outlines four critical pathways for successful transformation: maximising core business value, actively managing portfolios, optimising capital structures, and transforming operating models.
Family-controlled businesses, which make up 80% of the region’s conglomerates, have historically outperformed their peers. However, the report warns that family ownership can amplify both strong and weak performance, emphasising the need for governance clarity and succession planning.
As generational leadership transitions loom, the next decade will be crucial for these conglomerates. Amanda Chin, a partner at Bain & Company, stated, “The next wave of transformation will determine which groups close the performance gap and which fall permanently behind.” The success of ‘Emerging Stars’ demonstrates that decisive transformation can propel companies from the bottom quartile to the top within three years.
