Asian private equity focused on cash flow as fundraising falls to 12-year low

Private equity investment in the Asia-Pacific region is increasingly flowing into advanced manufacturing and healthcare, as global uncertainties push investors towards businesses with more predictable cash flow, according to Bain & Co research.

The move away from the previously dominant technology, media and telecommunications sector “has been a gradual move, driven by the external environment and uncertainties”, said Elsa Sit, practice vice-president in the Asia-Pacific private equity team with the global management consulting firm. “We see a shift towards … sectors that can offer more stable returns and more predictable cash flows.”

The shift came as fundraising for Asia-Pacific-focused private equity funds weakened, marking a fourth straight year of decline in 2025, according to Bain’s report published on Tuesday, based in part on a poll of 121 Asia-Pacific private equity general partners in November.

Total capital raised by these funds fell to US$58 billion last year, a 12-year low, with the amount raised down 37 per cent from a year earlier.

“Limited partners are more selective in picking the funds they want to bet on,” Sit said. “They are clearly backing those general partners who have a stronger track record, the ability to offer portfolio value-add, and to manage and exit the portfolio successfully and secure attractive returns for their limited partners.”

The technology, media and telecoms sector remained the largest destination for Asia-Pacific private equity in 2025, but its share of deal value fell to a 10-year low – about 25 per cent, the report revealed.