A recent study by Bain & Company revealed that Southeast Asia's conglomerates now face a crucial deciding point for the decade ahead: reinvent or risk falling further behind.
According to Amanda Chin, Partner at Bain & Company, the conglomerates in the region have reinvented themselves before, but this next wave of shifts will determine which groups close the performance gap and which fall permanently behind.
The report identifies four critical pathways that distinguish successful transformation:
- Maximise core business value
Top-quartile conglomerates are significantly more likely to hold industry leadership positions – 60% lead their primary sector, compared with only 10% of bottom-quartile peers. They also demonstrate stronger cost discipline: 70% improved operating expense productivity over the past decade, versus 40% of lower performers. Many are also focusing on capital productivity and adopting asset-light approaches to improve returns.
- Actively manage the portfolio
Top performers dynamically rebalance toward higher-growth, higher-return sectors and exit businesses where future growth is low and/or leadership is unattainable. Portfolio management has become a continuous, forward-looking discipline.
- Optimise capital structures
Conglomerates traded at an average 32% discount to sum-of-the-parts valuations from 2022 to 2025. Capital structures matter: groups with a listed parent and mixed (listed and unlisted) subsidiaries delivered the lowest TSR (1.2%), while private holding structures with public and private subsidiaries achieved the highest (8.1%). Leading conglomerates are simplifying ownership structures to unlock value and improve transparency.
- Transform the operating model
Many successful groups, facing increased scale and complexity of their portfolio, are shifting from traditional owner-operator models toward an “active investor” approach, with a lean corporate center focused on capital allocation and value creation, and strong business unit leaders empowered and accountable for execution.
