Private equity (PE) deal value in Southeast Asia (SEA) saw a notable decline in Q2 2025, with $1b deployed across 22 PE-backed deals, a stark contrast to the $5.3b across 20 deals in the same period last year. This drop, despite a 10% increase in deal volume year-on-year, is attributed to the absence of mega deals that characterised 2024, according to the EY Southeast Asia Private Equity Pulse report.
The financial services sector led the investments, accounting for 29% of the total, driven by a focus on emerging technology and consumer demand. Technology and healthcare followed closely, with 28% and 27% respectively. Singapore and Vietnam were the most active regions, contributing over 55% of the deal volume and 74% of the deal value.
PE-backed exits in the region were valued at $398m across eight deals, with secondary transactions gaining momentum due to muted IPO activity and increased liquidity needs. Luke Pais, EY-Parthenon Asia-Pacific Private Equity Leader, noted, “Whilst the short-term headwinds on mergers and acquisitions persist, it also serves as a catalyst for companies in SEA to explore new growth pathways and build operational excellence.”
Investor caution is heightened by uncertainties around future trade policies and potential portfolio impairments from disrupted trade flows. Globally, 76% of general partners cited tariff-driven uncertainty and macroeconomic outlook as significant impediments to the transactions markets.
Despite these challenges, opportunities remain for PE firms in areas such as growth capital, private credit expansion, and infrastructure investment, particularly in nations absorbing relocated manufacturing. These dynamics are expected to reshape regional PE opportunities, offering new avenues for investment and growth.
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