Private equity and venture capital investments in the Asia-Pacific region, excluding Japan, slumped in the first quarter amid an unstable macroeconomic environment.

Aggregate transaction value in the first quarter stood at $8.09 billion, down 45% from $14.70 billion in the same period in 2022, according to S&P Global Market Intelligence data. The number of deals declined to 43 from 62 transactions year over year.

Private equity transactions accounted for 9% of all first-quarter M&A deals in the region, which had a combined value of $95.10 billion. By contrast, M&A transactions in the region totaled $114.50 billion in the first quarter of 2022, 13% of which had private equity involvement.

Gloomy landscape

Based on trends seen in the first quarter, private equity deal activity in Asia-Pacific appears to be on track for a down year. Consultancy firm Bain & Co. said slower economic growth, declining consumer confidence, falling manufacturing output, high inflation and heightened geopolitical tensions contributed to investor gloom.

– Download a spreadsheet with data featured in this story. – Read S&P Global Market Intelligence's fourth-quarter 2022 Data Dispatch on private equity deals in Asia-Pacific excluding Japan. – Explore more private equity coverage.

"Investor exuberance and a superabundance of global capital helped propel Asia-Pacific deal value to an extraordinary high in 2021. That set the stage in 2022 for an equally sharp decline as economic forces battered the market, pushing deal value to the level of 2020," according to Bain's "Asia-Pacific Private Equity Report 2023."

"The macroeconomic landscape remains unstable, and higher inflation and weaker growth are likely to have a strong impact on investment choices and portfolio performance in the coming year," according to Bain.

Largest deals

The $1.82 billion acquisition of a 65.1% stake in South Korea-based dental implants company Osstem Implant Co. Ltd. by MBK Partners and Unison Capital Korea Inc. was the largest private equity deal in Asia-Pacific excluding Japan in the first quarter.

EQT AB (publ)'s pending $1.52 billion acquisition of household security services specialist SK Shieldus Co. Ltd., another South Korean company, came in second.