KUALA LUMPUR: Southeast Asia's private equity (PE) market saw a strong recovery in 2024, with deal value surging 60 per cent to US$16 billion from the previous year, mirroring trends across most Asia Pacific markets.

According to Bain & Company's Southeast Asia PE report, the rebound in deal value was largely driven by Singapore and Indonesia, fuelled by significant investments in digital infrastructure.

The report noted that despite the rise in deal value, the number of deals saw a slight decline, indicating ongoing challenges in the regional deal-making environment.

Meanwhile, exits experienced a significant recovery, with exit value climbing 30 per cent, mainly supported by transactions in Singapore and Malaysia.

"However, aging portfolios and a soft initial public offering (IPO) market continue to contribute to a lingering exit overhang.

"Fundraising remained challenging but pan-Asia-Pacific strategies have gained share in 2024, reflecting a strategic shift towards broader regional plays," it said.

The report said digital infrastructure, especially data centers and telecom towers was the best-performing sector in 2024, rebounding to its 2022 peak amid rising demand for scalable platforms backed by supportive policies.

It also noted that financial services, particularly financial technology drew heightened investor interest, growing at a faster pace in Southeast Asia than in the broader Asia Pacific region, reflecting the region's robust digital adoption.

Additionally, deal value in the energy and natural resources sector saw a sharp increase, driven mainly by strong activity in utilities and renewable energy.

Bain & Company advisory partner Suvir Varma said ongoing geopolitical shifts and export uncertainties are reshaping the global investment landscape.

He said in response, Southeast Asia's private equity market is expected to prioritise building exit-ready portfolios, strengthening value creation, and remaining agile.

"Competition is intense, underlining the growing need for differentiation and a clear investment sweet spot," Suvir added.