Report: Good year for private equity market

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Strong interest in Internet and consumer-related sectors

South-east Asia's private equity and venture capital market saw robust deal flow last year after a subdued 2015, thanks to strong interest in Internet and consumer-related sectors.

In a joint report, experts at management consultancy Bain & Company and the Singapore Venture Capital and Private Equity Association predicted a good year for the industry.

They added that rising interest rates are not likely to dampen investor appetites for private equity and venture capital, even as investment prospects across the region remain bright.

But it is also becoming tougher to identify good investments with prices being driven up by mounting competition for deals.

The annual South-east Asia Private Equity Report released last Friday showed private equity investments in South-east Asia soared to US$6.8 billion (S$9.5 billion) last year.

This was up from US$4.8 billion a year earlier and 14 per cent higher than the average deal value from 2011 to 2015.

Investments in the Internet sector accounted for a quarter of total deal value last year.

Buoyed by the region's rising middle class, other emerging sectors included agriculture, consumer products, retail, healthcare and education, the report found.

"We're not yet at the peak levels we saw just before or around the global financial crisis, but (deal flow) is coming back," said Mr Suvir Varma, who leads Bain's private equity practice in Asia-Pacific.

The region's deal market remains driven by Singapore, Indonesia and Malaysia, which together made up more than 80 per cent of deal value.

Investors also saw more successful exits last year.

These occur when investors cash out from their investments.