Southeast Asia private capital invested fell to $ 6.3 billion across 213 deals in the first half of 2025, showing clear signs of deal volume slowdown compared to previous years, Praxis Global Alliance said Tuesday.

The global consulting firm said in its report that geopolitical and macroeconomic uncertainties along with the impact of US tariffs, are expected to slow down deal activity.

As comparison, 2024 saw robust growth with $25 billion invested in over 593 deals – a 1.5 times year on year increase — with buyouts and large-ticket infrastructure driving the surge.

Despite stagnant deal volumes, investors remained active in pursuing resilient assets, reaffirming South East Asia’s relevance as a priority region amid global uncertainty.

Uncertain market conditions have fueled a surge in buyouts as investors sought control over portfolio companies and drive value creation.

Average deal size during the year also hits new high. The deals raised 48 percent year on year to $42 million in 2024, indicating investors’ preference for larger, value-focused transactions.

Private equity/venture capital funds invested $25 billion in 2024 across 593 deals. Their average deal size reduced about 15 percent compared to 2022.

Transportation and logistics, and digital infrastructure together drew about $8.5 billion in 2024, remaining the region’s top investment sectors in the private capital.

The two largest investment sectors, claiming 34 percent of total private capital in the region

Exit environment continues to remain challenging in the region with plateauing exits driven by aging portfolios and subdued initial public offering (IPO) market continuing to pose challenges.

Total exit value stagnant at $9 billion (77 exits) in 2024, as exits via public markets declined by about 4 percent, but secondary transactions became the preferred pathway.

According to Praxis, more funds are creating dedicated operating teams and expanding portfolio management for active value generation.

Growth funds remain resilient with $3.2 billion in fundraising, representing 29 percent of overall fundraising in 2024.

Meanwhile, over 70 dedicated growth funds raised capital between 2020 and 2024, consistently accounting for about 25 percent of annual fundraising activity.

It is noted that banking, financial services, and insurance (BFSI), energy & renewables, and healthcare & life sciences, continue to show substantial deal activity even as others contract.

Traditional sectors such as BFSI and healthcare, however, saw a decline in investment activity as the ecosystem continues to face challenges around valuation concerns, geopolitical risks and declining demand.

Market leaders Singapore, Malaysia, and Indonesia maintain double-digit shares in deal activity for 2024, with Malaysia’s average deal size growing 190 percent year on year to $173 million, driven by several large data center deals.

While deal value fluctuated throughout countries for the past three years, Malaysia has grown 7 times to $6.4 billion over 2022-2024.

Meanwhile, buyout transactions captured 54 percnet of total deal value in 2024 (up from 41 percent in 2023), with nine landmark deals exceeding $500 million, highlighting general partners’ growing focus on generating concentrated value.

Praxis expects weakening/stagnant deal activity and subdued exits this year as global uncertainty persists. Fundraising is also forecasted to remain flat.

“South East Asia’s investment landscape has demonstrated exceptional resilience, with significant buyout deal activity underscoring a renewed focus on value creation,” said Madhur Singhal, Managing Partner, Private Capital, Praxis Global Alliance.

“Despite global trade and valuation pressures, funds continue to prioritize infrastructure and digital sectors, with Malaysia’s surge reflective of this momentum,

“The exit environment remains complex as IPO markets soften, propelling secondary and private credit transactions as alternate exit paths,” he added.

Looking ahead to 2025, Praxis said investors are increasingly bullish on infrastructure with a key focus on energy and renewables along with the growth in private credit investments.

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