Freshfields Bruckhaus Deringer has lost its place at top of the Asia Pacific M&A league table, Mergermarket figures for Q1 reveal.

The magic circle firm took pole position in the ranking of firms by total deal value for all four quarters of 2015 but has fallen to 18th place for the first three months of this year. In the first quarter the firm worked on $8.87bn (£6.3bn) of deals.

Freshfields was displaced from the top of the league table for deal value by Chinese firm Fangda Partners which topped the table with deals totalling $57.25bn (£40.4bn) over the period. The PRC firm has climbed to first place from 24th in the table for the same period last year.

Davis Polk and Wardwell came second for deal value with $57bn (£40.1bn) worth of deals across eight mandates.

White & Case has also climbed significantly up the table rising to third place this year with $51.85bn (£36.5bn) against 153rd in Q1 2015.

Lowest in two years
In total 700 deals were conducted in the region – excluding Japan – in Q1 2016, worth $131.8bn (£92.8bn) down 34.2% on 1Q 2015. It is the lowest quarterly deal value since Q1 2014 which had a total of $114.8bn (£80.8bn). Despite the fall the region's share of the global deal total was 22.1% – the fifth highest share on record – due to weak deal levels across the globe.

Freshfields' Asia managing partner, Robert Ashworth says: "The somewhat slower first quarter likely reflects the volatility in Chinese equity markets around the middle of last year." He argues that all market stats tend to lag slightly behind the experience on the ground due, in part, to the time it takes deals to become public.

King & Wood Mallesons topped the rankings for deal volume in Q1 2016, as it did in Q1 2015, acting on 26 deals with a total value of $36.24bn (£25.2bn). Herbert Smith Freehills and Chinese firm Zhong Lun took joint second place with 19 deals each.

Mumbai firm Khaitan & Co has climbed up the rankings for deal volume to fourth place from 31st over the same period last year.

There is uncertainty everywhere for different reasons

There is agreement among those in the market that the drop in deal volume, both regionally and globally, is to be expected with a number of large ongoing economic and political events.

"The global deal volume figure is down and I think that that is not a huge surprise as there is uncertainty everywhere for different reasons," says Herbert Smith Freehills Asia corporate head Austin Sweeny.

"In Europe you have got Brexit and continued economic problems in Southern Europe. In Asia you have got questions over a China slow down, which I think are beginning now to have an effect and some of the local markets continue to be a bit depressed."

Outbound on the up
However, outbound deals from China have increased significantly from Q1 2015, with the figure up 346.1% over the same period this year. In total 83 deals accounted for $81.7bn (£57.5bn) worth of outbound activity, despite the uncertainty in the Chinese markets – the figure was only 17% behind 2015′s total outbound deals value.

China National Chemical Corporation's takeover of Syngenta AG for $45.8bn (£32.2bn) was the biggest deal globally of the quarter with mandates on the mega-deal going to, among others, Davis Polk & Wardwell, Cravath Swaine & Moore, Clifford Chance and White & Case.

They want to have more market share and we will see a lot of activity coming from China

"The outbound investment from China has been increasing and I think this year it will continue to grow," said White & Case China corporate head, Alex Zhang. "They want to have more market share in the US and Europe and we will see a lot of activity coming from China – not just technology and manufacturing but also financial services."

Conversely inbound investment to Asia has fallen dramatically – down 75.9% on Q1 2015- to $7.1bn (£5bn).

Japan has also seen an increase in activity with aggregate deal value back to pre-global financial crisis levels. Q1 2016 saw a total of $14.8bn (£10.4bn) worth of deals – the highest figure since Q1 2008 $17.3bn (£12.2bn).