Southeast Asia private equity faces prolonged exit pressures amid selective deal recovery in 2025

SINGAPORE - Apr 24, 2026 - Southeast Asia's (SEA) private equity (PE) market remained subdued in 2025, according to Bain & Company's Southeast Asia Private Equity Report 2026. Deal value declined about 10% year on year to approximately $14 billion across 84 transactions. The recovery remains uneven, with value concentrated in a small number of large transactions, in line with broader Asia-Pacific trends.

Deal activity was led primarily by growth and buyout investments. Government-linked investors played an increasingly prominent role in high-value deals, often partnering with global and regional funds. Large deals accounted for a disproportionate share of total value, reinforcing the concentration of capital in the region.

Capital remains available, but deployment is more selective. Investors are prioritizing high-quality assets with strong management teams, clear competitive advantages, and defined exit pathways, reflecting a more disciplined approach amid a limited pool of investable opportunities.

Exits continue to constrain the market. Exit value declined 32% in 2025, with trade sales remaining the dominant exit route and IPO activity showing early signs of recovery. As holding periods lengthened, the region is seeing an increasing number of aging assets, and secondary transactions are becoming an increasingly important path to liquidity.

"The Southeast Asia private equity market is stabilizing, but the recovery is narrow and shaped by exit constraints," said Tom Kidd, head of Bain & Company's Southeast Asia Private Equity practice. "Capital is concentrating in fewer deals, and investors are more selective than at any point in recent years, with a clear focus on assets that can deliver value through execution."

With exit timelines extending, operational value creation is now the primary driver of returns. Funds are focusing on EBITDA growth through cost optimization, pricing, and commercial excellence, with less reliance on multiple expansion. At the same time, artificial intelligence (AI) is becoming more embedded in diligence and portfolio management. More than 70% of investors report its use, though impact remains early-stage and focused on productivity gains.

Sector investment is increasingly aligned to structural growth themes. Digital and AI-related infrastructure, including data centers and enabling technologies, is attracting strong interest. Healthcare remains a core focus, with deal value increasing by approximately 60% over the past five years, driven by platform-building and consolidation. Manufacturing and industrials are benefiting from China+1 supply chain shifts, particularly in Vietnam and Indonesia. In financial services, fintech remains an area of focus, while consumer investments are evolving toward localized, value-driven, and differentiated offerings.

Singapore continued to anchor regional dealmaking, accounting for the largest share of activity in Southeast Asia at $7 billion. Malaysia recorded the strongest year-on-year increase in deal value at $5.3 billion. Exit activity remained muted, with Singapore's count holding steady at four and Vietnam recording zero exits, reflecting the continued difficulty of realizing liquidity in the current environment.

Bain's survey of private equity investors across Asia-Pacific indicates continued caution in Southeast Asia. Investors cite exit challenges as their top concern, alongside fundraising pressure and limited high-quality deal flow. Many expect returns to rely more on revenue growth and operational improvement, with less contribution from leverage.

Broader Asia-Pacific trends reinforce this outlook. Exit activity is improving and beginning to restore liquidity, but fundraising remains under pressure and macro uncertainty persists.

"As exit timelines extend, funds need to work harder to generate attractive returns," said Suvir Varma, advisory partner to Bain & Company's Global Private Equity practice. "Success will depend on having a clear investment thesis, focused sector expertise and strong operational capabilities".

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• Yan Xin Tay - [email protected]
• Ann Lee - [email protected]