Private equity market defies regional slowdown

Technology deals helped lift capital deployed to $6.35b in the first half.

Singapore's private equity market posted higher deal volume and capital deployment in the first half, bucking a broader Southeast Asia trend of fewer transactions amid war in the Middle East.

More than $6.35b ($5b) was invested in Singapore's technology sector in the first six months, exceeding the level recorded a year earlier, Neha Singh, chairperson and managing director at Tracxn Technologies Ltd., told Singapore Business Review.

Deal volume rose to 16 rounds from 13 a year earlier, whilst average deal size nearly doubled to $254m (US$200m), she said.

Across Southeast Asia, private equity transaction volume fell to 29 deals in the first half from 36 a year earlier. Capital deployed, however, rose to about $12.8b ($10.1b) from $5.3b ($4.2b), driven by a handful of deals valued at more than $1.3b ($1b), Luke Pais, ASEAN private equity leader at EY-Parthenon, said.

“Many of the region's largest transactions were centred in Singapore, reinforcing its position as the leading hub for private equity activity in Southeast Asia," he said in an emailed reply to questions.

Technology and digital infrastructure attracted significant investor interest during the period. Singapore-based DayOne Data Centers raised more than $5.7b ($4.5b) in a funding round led by Coatue Management, LLC. and Hillhouse Investment Management Ltd. KKR & Co., Inc. also led a group in the partial acquisition of ST Telemedia Global Data Centres.

Pais said investors continued to favour sectors supported by long-term growth trends, including data centres, education assets, and real assets linked to regional economic expansion and increased adoption of artificial intelligence.

Singh attributed Singapore's performance partly to measures aimed at strengthening the city-state's capital markets, including proposals for a Global Listing Board linking Singapore Exchange and Nasdaq listings.

She also cited rising fund registrations in Singapore and government-backed investment programmes.

Singapore-based managers captured most of the capital raised in Southeast Asia in 2025, supported by regulatory clarity, tax-efficient fund structures, an established institutional investor base, and government-supported investment initiatives, Pais said.

"Within Southeast Asia, Singapore and Malaysia accounted for 73% of total deal volume, reinforcing their importance as key investment markets for regional private equity firms," he said.

Singapore also continues to attract fund managers through its variable capital company (VCC) framework, a fund structure designed to make it easier to establish and manage investment funds.

More than 1,400 VCCs and 3,000 sub-funds had been set up or moved to Singapore by the end of 2025, Singh said.

Private credit also gained momentum during the period. SeaTown Holdings International Pte. Ltd.'s Private Credit Fund III raised $1.1b ($900m), whilst CapitaLand Investment Ltd. raised $407m ($320m) for its Asia-Pacific Credit Programme II.

Andrew Thompson, a partner and head of asset management and private equity for the Asia-Pacific region at KPMG in Singapore, said private credit has benefited from tighter banking regulation and demand for more flexible financing structures.

Private credit providers could offer financing arrangements that combine debt and equity and provide repayment terms that traditional lenders might not offer, he said.

Despite strong fundraising and investment activity, Thompson said private equity firms continue to face challenges exiting investments.

A backlog of unsold assets has persisted across the Asia-Pacific region, leaving some fund managers holding investments longer than originally planned, he said.

Singh expects capital deployment in Singapore to more than double this year from 2025 levels, although transaction volumes may remain relatively stable.

“Singapore will continue to account for between 75% and 90% of the total deal volume and deal value in terms of Southeast Asian investment,” she said.