Private-equity investors spy bargains in Japan, says Jacky Wong in The Wall Street Journal. Private-equity funds invest in private companies or buy out publicly listed ones. Fund managers have been amassing a war chest.
“Total assets under management in Japan-focused private equity amounted to $35bn as of September last year... double the sum at the end of 2015.” The funds have $14.9bn of cash to deploy.
Corporate-governance reform is making Japan more appealing to foreign investors. Japan’s “smaller family-controlled… companies without a successor” also offer rich pickings.
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Cheap financing from Japanese megabanks is augmenting the trend, Kazuhiro Yamada of private-equity group Carlyle tells the Financial Times. There have been 25 private-equity deals in Japan this year, worth $8.6bn, compared with $9.5bn for the whole of 2020, say Kana Inagaki and Leo Lewis in the Financial Times.
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Hedge funds are also getting in on the act, says Bei Hu on Bloomberg. Japan’s small venture-capital industry means many of its start-ups list on public markets earlier than in other countries. That can cap the firms’ growth: “companies often get stuck with a market value below $300m and limited trading volume”.
Japan, the world’s third-largest economy, has a mere six “unicorns” (a private start-up business with a value of over $1bn). More hedge-fund interest could change that.
