According to a Bloomberg report, Indonesia has become lackluster as a thriving ground for private equity. Kuala Lumpur-based Navis Capital Partners Ltd. managing partner Nicholas Bloy said, "Expectations have been high over the past two years for private-equity deal making in Indonesia. But many players in the industry had a sobering reality check and now need to be more realistic in their return expectations, as they are facing inflated valuations by sellers." 

Data compiled by Bloomberg and the Asian Venture Capital Journal showed foreign private equity firm acquisitions went down from 10 in 2011, seven last year, and only 4 this year. Total transaction values disclosed also fell, from USD649 million for nine deals in 2011 to USD324 million for six deals last year. Transaction values for this year went dangerously low, with USD87 million for three out of four of the deals with disclosure of financial details.

The report identified three factors that made acquirer's market assumptions complicated. These three factors are as follows, high valuation expectations by sellers, competition from strategic buyers and the changing regulations issued by government. 

However, market was still optimistic even after the Jakarta Composite Index's (JCI) 22% decrease from May 20 this year, when it recorded its all-time high. The Jakarta Composite Index (JCI) jumped 76% over the past 4 years as compared with the 11% jump in the MSCI Emerging Markets Index for the same period. 

According to Agnes Safford, managing director at Jakarta-based advisory firm GreenWorksAsia,"(But) you can't come here and think it's fast and easy. It's not that kind of country. You need a lot of patience. It's also very much about establishing relationships, and that takes a lot of time."