IN 2014 Bain & Company research discovered that conglomerates were thriving in South-east Asia, outperforming their counterparts in developed markets and consistently delivering higher shareholder value than companies in the region that focused on a single business. Since then, the business climate has become much more challenging, with the global slowdown in GDP growth, China's economic restructuring, slumping commodity prices and increased political risk in South-east Asia and beyond.

These strong headwinds prompted us to re-examine conglomerates, expanding our research to include 67 large family- and government-linked conglomerates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam over a 10-year period (2006 to 2015).

We found that although creating value has become much more difficult, conglomerates continue to outperform their focused peers, albeit by a noticeably reduced margin. Median total shareholder return (TSR) fell from an impressive annual 29 per cent from 2003 to 2012 to a still-respectable 13 per cent from 2006 to 2015. (TSR is defined as stock price changes, assuming reinvestment of cash dividends.) Pure plays saw median TSR decline from 19 per cent to 11 per cent.