Last year was challenging for the global private equity market, but interest in the Japanese PE landscape has rapidly grown over the past 12 months, Private Equity International reported. An April 2 article titled “Three key trends in Japanese PE” in their annual special report on Japan discussed how the Japanese PE market is developing and what lies ahead.
The article featured insights from Tokyo office managing partner and Asia private equity and M&A chair Tsuyoshi Imai. “For about the last 15 years, investors were focused on China,” Tsuyoshi said. “But for various reasons, investments often didn’t generate the returns that an economy growing at China’s pace should be generating. That, plus the more recent geopolitical tensions, caused sponsors to look next door to Japan.” Japan narrowly avoided falling into recession in the final quarter of 2023 but while investors don’t yet seem to be deterred, Tsuyoshi outlined that firms and advisers need to be cautious. “On the adviser side, there are now almost two generations that have not experienced a real recession, and at times I’m seeing deals without much of a safety net. If the next recession results in a number of high- profile failures, I could see market sentiment changing.”
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