Private equity activity picks up in Southeast Asia in the third quarter of 2023, according to a survey by Ernst & Young.
The EY Quarterly Private Equity Update: Asean found that the region saw a total of 18 private equity-backed deals worth US$1.8 billion, compared with 18 deals worth US$1.2 billion in the same period last year.
The survey, which provides a roundup of the private equity deals along with capital activities across major sectors in Southeast Asia from July to September 2023, revealed that private equity-backed investments centered on the technology, consumer, and infrastructure sectors, which together garnered roughly 40% of deal volume.
As per private equity-backed exits, there were five deals valued at US$1.3 billion during the third quarter, compared with seven deals valued at US$895 million during the same period in 2022.
Meanwhile, in a separate EY global survey of a representative sample of private equity investors across geographies and fund sizes, two-third of respondents expect deal activity to accelerate further over the next six months, and just 13% expect a decline.
The global survey found that private equity firms zero in on the performance of the portfolio companies.
While PE firms execute across the full range of value creation levers, given today’s operating environment, cost, liquidity and working capital initiatives are taking priority.
Eighty percent of the private equity professionals surveyed indicated they are focusing on helping companies get visibility of cash and liquidity needs; and 70% of private equity firms are paying more attention to cost takeouts than usual. For those firms, a thoughtful approach that keeps costs under control while keeping growth drivers intact is imperative.