The private equity (PE) industry in the Asia-Pacific region chalked up a record showing last year, with all signs pointing to it having entered a new era - one defined by a broader market, intense competition and shifting sources of value.
Bain & Company's (Bain) Asia-Pacific Private Equity Report 2018 points to deals being larger, investment broader and large global investors being more active than ever, with all markets in the region rising to new highs, and total deal value reaching a record level last year.
"Overall, the Asia-Pacific PE industry has never been healthier," said Mr Suvir Varma, leader of Bain's Asia-Pacific Private Equity and Sovereign Wealth Fund practice, who wrote the report.
He added, however: "For fund managers and investors, the region clearly has reached a turning point, with implications for both future investment decisions and portfolio company management."
The global management consultancy's report said that, despite intense competition, steady economic growth may no longer propel multiples.
PE firms will need to help their portfolio companies accelerate organic growth and improve operations, to maintain high returns in a changing environment - and that, in turn, will require new skills and capabilities.
Looking back at last year, Bain's report said the region's PE deal value soared to US$159 billion (S$209 billion) last year, up 41 per cent over 2016 and 19 per cent higher than the previous all-time high of US$133 billion in 2015.
Exit value reached US$115 billion, making it the second best year on record, just below 2014's, while exit activity hit a record high. And fund-raising rose 6 per cent to US$66 billion, above the five-year historical average.
Two key forces powered growth last year: investors' rising confidence in the region as the macro climate improved; and company owners' greater overall acceptance of PE funding.
Major players in the industry - including global and regional PE firms and institutional investors - were more active in the region last year, which accelerated the flow of large deals.
Geographically, Greater China - China, Hong Kong and Taiwan - continued to attract the most capital; deal value rose 15 per cent to US$73 billion last year.
But, as Bain's report pointed out, strong PE activity spanned all markets, with Japan and South-east Asia gaining significant market share.
Japan's deal value jumped 137 per cent to about US$25 billion last year, while South-east Asia's market more than doubled to US$20 billion, a record high.
The Internet and technology sectors remained hot - attracting nearly half of the deal volume in 2017, and for the third year running.
Highly visible deals included SoftBank Capital's US$2.6 billion investment in Flipkart Online Services in India, as well as the Singapore-based US$2.5 billion Grab deal, led by a consortium of investors including Toyota's Next Technology Fund and SoftBank Capital.