MALAYSIA Trends and Developments Contributed by: Stephanie Phua, Wong & Partners
Private Equity Trends in Malaysia – An Overview Escalating trade tensions and heightened geopolitical tensions have added complexity to both private equity (PE) investments and exits in South-East Asia in 2025. Reflecting these challenges, according to MergerMar - kets’ APAC M&A Deal Drivers: Q1 2025 report, M&A activity in South-East Asia softened in the first quarter, with 147 transactions announced worth a combined USD9.7 billion, representing year-on-year declines of 17.4% and 22.2%, respectively. Although Asia-focused PE funds continue to hold high levels of dry powder, PE investors cannot afford to pause deal-making indefinitely. With pressure to deploy capital, general partners are selectively pursu - ing deals despite the challenging environment. In Malaysia in particular, defensive sectors such as healthcare and education, and targets with a main revenue of domestic consumption, continue to see deal-making and sustained interest due to relative insulation from trade shocks. New funds from KWAP’s Dana Pemacu and Khazanah’s Dana Impak are also poised to kick-start first-time investments and keep Malaysian PE deal volumes buoyant. Unlike acquisitions, exit activity has moved at a slower pace in the first quarter of 2025 and this is a trend which is likely to continue into the rest of 2025, largely in part because of valuation uncertainty and slower deal pacing, as general partners await clarity. This will likely lead to an increase in secondary transactions and continuation funds as financial sponsors hold out for more favourable market conditions and better returns. 2024/2025 deal activity and exits Despite the headwinds, PE activity in Malaysia in 2024 and Q1 2025 remained robust, with recent large-cap deals such as: • the USD4.1 billion privatisation of Malaysian Air - ports Holdings Berhad by Gateway Development Alliance (a consortium comprising the Employees Provident Fund, Global Infrastructure Partners and Abu Dhabi Investment Authority); • the USD694 million privatisation of Silverlake Axis led by Ikhlas Capital;
• the MYR3.92 billion exit from Island Hospital by Affinity Equity Partners; and • the acquisition of the Golden Fresh group by Affin - ity Equity Partners. Momentum for mid-market PE activity (the traditional wheelhouse for PE investments in Malaysia) remains consistent, primarily in the consumer, healthcare and industrial sectors, setting the stage for a promising second half of 2025. Gestating exits and an increase in strategic divesti - tures by corporates will also likely increase the num - ber of exits and secondary transactions in the Malay - sian PE space in the next 12 months. Upcoming processes involving digital infrastructure, consumer and industrial assets have already been launched and are expected to close in the last quarter of 2025. Recent key trends Resurgence of IPO exits According to Deloitte’s Southeast Asia Mid-Year IPO Snapshot 2025 report, initial public offerings (IPOs) in South-East Asia regained momentum in the first half of 2025 with Malaysia leading in the ASEAN region and emerging as the only market to achieve growth in both IPO volume and proceeds. This signals an alter - native exit path for PE investors buoyed by a string of successful PE-backed IPO exits such as the listing of budget retailer Eco-Shop, Mr.DIY Group and the upcoming Tealive/Bask Bear operator, Loob Bhd. Data centre boom Malaysia has become one of South-East Asia’s most actively pursued locations for digital infrastructure in the past two years, attracting an estimated USD59.4 billion in digital investments between 2021 and 2024, and PE investment is rapidly increasing in this sector, as illustrated by: • AREA’s investment and proposed construction of its hyperscale AREA Data Centre Campus in Delapan, Kedah; • Digital Bridge’s acquisition of data centre firm AIMS Group (valuing AIMS at MYR3.2 billion) from TIME dotCom; • Gaw Capital Partners’ investment in Cyberjaya (under its Infinaxis Data Centre platform); and
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