Southeast Asia conglomerates enter a new era of reinvention as top performers pull decisively ahead

SINGAPORE - March 16, 2026 - A new report, Southeast Asia Conglomerates: It's Time for Reinvention, by Bain & Company reveals a widening performance divide among the region's conglomerates. While the sector continues to trail pure-play companies on average, a distinct cohort of top performers has pulled decisively ahead, delivering 20% annual total shareholder returns (TSR) through disciplined reinvention and demonstrating that underperformance is not inevitable.

"The story has evolved," said Jean-Pierre Felenbok, senior advisory partner at Bain & Company. "For two decades, we have tracked how Southeast Asian conglomerates adapted, or failed to adapt, to shifting economic cycles, competitive dynamics, and leadership transitions. Today, we see something more important for their future: a subset of leaders has proven that reinvention can unlock substantial value even in a lower-growth environment."

The report finds that conglomerates delivered an average annual TSR of 4% from 2016 to 2025, trailing pure plays by 5%. This decline is attributed to three primary factors: erosion of traditional advantages, economic slowdown and the failure to evolve operating models at the pace required, in many cases compounded by leadership succession challenges. These findings build on Bain's 2023 report, which showed that conglomerates had lost their historic performance premium and were no longer keeping pace with pure plays since the middle of the 2010-2019 decade.

Beneath the aggregate numbers, a clear performance bifurcation is emerging. Top-quartile conglomerates achieved 20% annualized TSR from 2016 to 2025, a 6% increase compared to the prior tracked decade from 2013 to 2022. Over the past three years, they narrowed the performance gap with top-quartile pure plays from 16% to 8%.

Top-performing conglomerates are anchored by two archetypes:

• All-weather stars, which have consistently delivered strong returns over two decades.
• Emerging stars that have leapt from the bottom quartile to the top following bold transformation.

This performance divergence marks a turning point. Conglomerate underperformance is no longer a universal outcome but increasingly a matter of strategic choice and execution. Drawing lessons from both archetypes, the report identifies four critical pathways that distinguish successful transformation:

1. Maximize core business value

Top-quartile conglomerates are significantly more likely to hold industry leadership positions - 60% lead their primary sector, compared with only 10% of bottom-quartile peers. They also demonstrate stronger cost discipline: 70% improved operating expense productivity over the past decade, versus 40% of lower performers. Many are also focusing on capital productivity and adopting asset-light approaches to improve returns.

1. Actively manage the portfolio

Top performers dynamically rebalance toward higher-growth, higher-return sectors and exit businesses where future growth is low and/or leadership is unattainable. Portfolio management has become a continuous, forward-looking discipline.

1. Optimize capital structures

Conglomerates traded at an average 32% discount to sum-of-the-parts valuations from 2022 to 2025. Capital structures matter: groups with a listed parent and mixed (listed and unlisted) subsidiaries delivered the lowest TSR (1.2%), while private holding structures with public and private subsidiaries achieved the highest (8.1%). Leading conglomerates are simplifying ownership structures to unlock value and improve transparency.

1. Transform the operating model

Many successful groups, facing increased scale and complexity of their portfolio, are shifting from traditional owner-operator models toward an "active investor" approach, with a lean corporate center focused on capital allocation and value creation, and strong business unit leaders empowered and accountable for execution.

Family ownership: amplifier of strength or weakness

Family-controlled businesses represent roughly 80% of Southeast Asian conglomerates. On average, they have historically outperformed more broadly owned peers by 5- 6% in 10-year TSRs.

However, family ownership also amplifies both strong and weak performance. Among top-quartile performers, family-controlled conglomerates achieved a 10-year TSR of approximately 21%, compared with 14% for non-family-owned peers. In contrast, bottom-quartile family-controlled groups significantly underperform their non-family-owned counterparts. These findings underscore the importance of governance clarity, aligned objectives, and succession planning.

As generational transitions unfold, many family-controlled groups are adopting active investor models to preserve their Founder's Mentality® while ensuring long-term scalability.

A defining decade ahead

Southeast Asia's conglomerates face a clear choice: reinvent or risk falling further behind. The success story of 'Emerging Stars' proves that decisive transformation can buck the trend and propel companies from bottom quartile to the top within three years.

"Southeast Asia's conglomerates have reinvented themselves before," said Amanda Chin, Partner at Bain & Company. "The next wave of transformation, particularly as many first- and second-generation founders prepare to pass the baton, will determine which groups close the performance gap and which fall permanently behind."