India emerged as the Asia-Pacific region’s top performer in 2024, recording the only double-digit growth in both deal value and deal count, and becoming the region’s biggest exit market driven by a surge in IPO exits, according to Bain’s Asia-Pacific Private Equity 2025 report.

For private equity investors in the Asia-Pacific region, 2024 brought glimmers of recovery, says the report, adding that investment rose moderately in most countries, reversing two years of precipitous declines, while an 11% rebound in deal value for the region gave fund managers a jolt of optimism.

India and Japan were the only two markets that maintained a deal count in 2024 similar to the previous five-year average. "Although India faces macroeconomic challenges, including inflation and consumption slowdown, it remains one of the fastest-growing countries in the region based on GDP, and investors are drawn to its strong growth fundamentals," says the report.

The report says Australia–New Zealand’s deal value more than doubled, fuelled by the $16 billion AirTrunk deal. Japan’s deal count was unchanged, but deal value was down sharply vs. the previous year, which included multiple megadeals. In South Korea and Southeast Asia, dealmaking revived.

The dealmaking activity in Asia-Pacific countries diverged sharply in 2024, reflecting changing dynamics in the region’s economies. As recently as 2020, China represented more than half of all Asia-Pacific deal value, but that share fell to 27% in 2024. In recent years, general partners (GPs) and limited partners (LPs) have channeled a greater share of investment dollars to India and Japan, and that trend continued in 2024, says the report. "More than 70% of GPs in India thought 2024 was a better year. By contrast, almost 60% of Greater China investors thought it was worse than 2023."

Sectors that are more resilient and lower risk, including communications and media, services, and financial services, gained share. Intense competition for fewer attractive deals continued to squeeze weaker funds out of the market, and the number of active investors in the region declined significantly, finds the report. "The top 20 funds’ contribution to total deal value remained above 40%."

The value of Asia-Pacific IPO exits fell to only 31% of total exit value in 2024, compared with the previous five-year average of 48%. The main reason for that decline, says the report, was the sluggish public market performance in China and other markets.

Looking forward, major global private equity funds plan to double down in India and Japan and deploy more capital in those countries. Carlyle, for instance, aims to allocate about 30% to 35% of its new pan-Asia fund to India, making it the firm’s largest market in Asia. Bain Capital plans to invest 20% of its Asia fund in India and is on track to invest up to $10 billion in India over the next three to five years.