Southeast Asia private equity deal activity slowed in the second quarter of 2026 amid heightened investor caution, according to EY‘s recent study.
PE investments in the region during the period included 10 PE-backed investments worth US$935.5 million, compared with 19 deals worth US$9.2 billion in the first quarter.
PE-backed deal volume fell by 55% year over year, while deal value saw a year-on-year decrease of 58% over the same period.
According to EY, Singapore accounted for 70% of deal volume across the region, marking its status as an attractive business and financial hub, amid a more cautious investment environment.
Furthermore, capital deployment during the three-month period concentrated in mid-market transactions, with only one large-ticket investment exceeding US$500 million and no megadeals above US$1 billion, reflecting continued geopolitical uncertainty, which has increased investor caution and prolonged decision-making cycles.
As for the sectors, real estate accounted for 90.8% of total deal value, significantly outpacing the technology (5.3%) and consumer (2.2%) sectors, largely driven by a single real estate transaction that secured US$850 million in additional equity capital from existing shareholders.
EY said the region recorded 11 exits generating US$4.2 billion in realised proceeds, reflecting the strongest liquidity conditions since the first quarter of 2022.
The study also highlights that the region’s private debt market is benefiting from growing investor interest in Asia-Pacific, a region that remains structurally underpenetrated despite its economic significance.
According to EY, as the Asia-Pacific private debt market evolves beyond traditional direct lending into areas such as asset-backed finance, specialty finance, capital solutions and private debt secondaries, private debt providers are finding an expanding set of opportunities across the region.
