Private equity deals are dwindling in both size and number, as the global slowdown reduces investor appetite for risk.

A survey by Ernst & Young shows 10 initial public offerings were executed by private equity companies in the Asia-Pacific region in the third quarter. That is two lower than the previous quarter.

Deal sizes were markedly lower too, slumping to US$609 million in aggregate in Q3, from US$3.3 billion in Q2.

The largest deal out of the region was by CITIC-backed Beijing Jangho Curtain Wall Company, which raised US$340 million on the Shanghai exchange. Ernst & Young said this offering was considered high even despite a loss of 1.6 per cent on the Shanghai composite index.

Private equity-backed IPO activity globally also dropped sharply in the third quarter of this year, on increasing global fears of a double-dip recession.

A total of US$2.9 billion was raised by 21 companies worldwide last quarter. That is a 84 per cent decline in capital raised from the previous period, and a 53 per cent drop in number compared to the second quarter.

According to the “Private Equity, Public Exits” quarterly analysis by Ernst & Young, this is the lowest number since Q2 2009.

Source: CNA