KUALA LUMPUR (Feb 15): Asia's private equity deal volume jumped 96% to US$110 billion, leading the charge globally in 2017, although deal counts fell, as in the rest of the world, said McKinsey & Co, Inc in a statement yesterday.

Based on a report called The rise and rise of private markets, McKinsey found both trends reflect greater discretion in investor activities, with more capital being deployed in fewer companies and more buy-out deals taking place.

Its senior partner and co-lead for private equity and principal investor practice Vivek Pandit said private equity investors in Asia are moving from the passenger's seat to the driver's seat.

"Their role is transforming from one centred around strategic guidance and governance to strategy formulation and management control. While being in greater control of talent and operating decisions, they are quickly learning these aren't autonomous cars built for speed and retooling is required," he added.

The global management consultant said the report's results on five asset classes — private equity, infrastructure, private debt, natural resources, and real estate — revealed that fundraising and assets under management reached record highs in 2017.

Private asset managers raised nearly US$750 billion last year, which was a record and an extension of a cycle that began eight years ago.

"Private equity and debt enjoyed large increases — 11% and 10%, respectively, while typically smaller asset classes fell — natural resources (by 5%), and infrastructure by 4%. It was the second year of double-digit growth for private equity.

"Within this tide of capital, one trend stands out — the surge of megafunds. Megafunds now account for 15% of total fundraising from 7% in 2016, and exceeding their previous peak of 14% in 2007," McKinsey said.

It added that "more capital (was) raised by funds under a buyout thesis than ever before, with mega funds — previously close to non-existent in this region (Asia) — contributing more than US$20 billion of the US$60 billion private equity funds raised in Asia over 2017".

Asian mega funds also made a large contribution to the global total of US$174 billion, it said.