SINGAPORE - The overall value of private equity (PE) deals last year rose 42 per cent from the year before, to reach US$7.8 billion (S$10.74 billion) in South-east Asia, driven largely by the technology sector, EY said on Thursday (June 15).
In particular, the region's two ride-hailing apps, Grab and Go-Jek, raised a staggering US$1.3 billion in the third quarter, the consultancy said in a new report.
Indonesia's on-demand motorbike taxi service Go-Jek raised US$550 million, led by PE firms KKR & Co. and Warburg Pincus, while Grab raised US$750 million from a funding round led by Softbank Group.
Other big deals included the sale of telco EdotcoAsia to Malaysian sovereign wealth fund Khazanah Nasional and Innovation Network Corp of Japan for US$600 million and the sale of funeral service provider Nirvana Asia to CVC Capital Partners for US$1 billion.
The overall number of PE deals fell last year to 123, from 162 deals in 2015, as 2016's PE investment scene started off soft, as investors took a more tentative approach, but picked up in the second half of the year, EY said.
Fundraising continued to increase in the first quarter of this year, it added.
Total funds raised in the first three months of the year was US$2.8 billion, compared to a total of US$2.3 billion raised across the full year of 2016.
The trend of large PE deals in 2016 is expected to set the tone for deal-making this year, said Mr Luke Pais, the Asean mergers & acquisitions and private equity leader at Ernst & Young Solutions.
"We expect a continued uptick in deal activity this year. Market conditions in South-east Asia are currently attractive for PE investments. While there are short-term headwinds, the long-term prospects of the region remain solid.
"It is a good time for businesses with ambition to work with PEs to consolidate their domestic and regional positions. There remains greater PE interest in the technology sector as companies and business models of scale emerge. However, we do see deals taking time to complete and hard work required post-investment to realise the investment thesis."