While the private-equity\u00a0business remains in the doldrums in much of the world, the Asia\u2013Pacific region stands out as an exception. A recent McKinsey report,\u00a0Private equity Asia\u2013Pacific: Is the boom back?<\/em>, shows that in 2011, Asia was the world\u2019s only major region where these firms\u2019 total investment values returned to 2006 levels\u2014a total of some $65 billion (exhibit). At 21 percent of global deal values, Asia\u2019s share of the private-equity business is now close to matching Asia\u2019s share of global GDP: 28 percent. Yet the gap between the two figures leaves substantial room for growth: on average, the ratio of private-equity investment to GDP among Asian countries is less than half that of the United States or the United Kingdom.<\/p>\n Taking advantage of the opportunity will mean confronting rapid changes. Among the most notable is a sharp increase in deal volumes, which are growing faster than total deal values almost everywhere in Asia. Across the region, volumes more than doubled, while values have risen by only 40 percent. The size of the average deal is therefore falling.<\/p>\n Consequently, investors feel new pressure for strategic innovation, especially in light of a steady (if slow) recovery in fund-raising. More money chasing smaller deals may strain some players\u2019 current business models. Partly as a result, partnerships with strategic acquirers are becoming increasingly common, reflecting Asia\u2019s newfound prominence as a source of outbound M&A. The number of \u201ccornerstone\u201d deals, in which a fund takes part in an initial public offering (IPO) by agreeing to hold its shares for a certain period of time, has also continued to increase, despite a weak IPO market in much of the region. And investors are pushing into countries, including Vietnam and Indonesia, that previously attracted little attention.<\/p>\n Change also marks the exit stage of investments, both for general partners and limited partners. For the former, volatile public-equity markets meant that, on the whole, exits were down by almost 40 percent in 2011\u2014especially via IPOs (notwithstanding a few notable exceptions), which fell almost 60 percent. But for the latter, the news is more encouraging: a maturing market for \u201csecondary\u201d funds (which invest in limited partners\u2019 interests in existing funds) has increased the liquidity and flexibility of limited partners\u2019 investments.<\/p>\n The report then provides an in-depth look at the six diverse markets that together account for virtually all private-equity investments in the region: Australia\/New Zealand, Greater China, India, Japan, South Korea, and Southeast Asia. Among the highlights:<\/p>\n