Sentiment toward Asia-Pacific private equity is beginning to recover, supported by improving exit activity and a return to positive investor cash flows, although ongoing geopolitical tensions could weigh on the rebound, according to a report by Bloomberg citing comments from consultancy Bain & Co.
Sebastien Lamy, co-head of Bain’s Asia-Pacific private equity practice, said that while conflict in the Middle East has yet to significantly disrupt dealmaking in the region, a prolonged war could have broader implications for markets, valuations and transaction activity.
Fundraising conditions remain challenging. The region accounted for just 5% of global private equity fundraising in 2025, with total capital raised falling to $58bn — the lowest level in over a decade. Although deal volumes increased, overall transaction value declined by 8%, with average buyout sizes dropping to a five-year low of approximately $438m.
Exit activity provided a more positive signal, with proceeds from initial public offerings rising sharply during the year. However, a backlog of unrealised investments—particularly from deals completed in 2020 and 2021—continues to weigh on the market. Smaller managers are facing the greatest pressure, especially those yet to demonstrate consistent distributions to investors.
Japan stood out as a key market, benefiting from corporate governance reforms, divestments and favourable macro conditions, including a weaker currency and low borrowing costs. Meanwhile, activity in Greater China showed signs of stabilisation, with investor sentiment improving, although global firms remain cautious on capital deployment.
Sector trends also shifted, with technology, media and telecommunications remaining the largest segment by deal value, despite its share falling to a decade low. Advanced manufacturing and services gained ground, while retail dealmaking saw a modest recovery.
Overall, Bain expects activity to gradually pick up, with Japan, India and Southeast Asia likely to drive the bulk of investment in the near term.
