Asian private equity investors have had a good ride, but the outlook is dimming

The outlook for Asia Pacific private equity deal making is growing increasingly gloomy, according to Bain & Company.

The global management and consulting firm said Friday that fundraising fell sharply last year and worries are rising about overheating investment in Chinese innovation. On top of that, U.S.-China trade tensions, rising interest rates and growing competition among large and small funds are worrisome headwinds, Bain said Friday in its Asia Pacific Private Equity Report 2019.

In particular, it warned that private equity investors are increasingly on guard about China‘s internet-based “new economy” sector, described as a “speculative bubble” that may burst.

The Chinese new economy is commonly defined as companies riding the wave of the expanding mobile internet, such as online shopping platforms and other web-based services including ride-hailing, food delivery and online financial services.