Analysis of Japan’s private equity market and recommendations for Japanese companies – 2021

To survive in the post-COVID era, it is becoming more and more important for business owners and executives in Japan to accelerate reforms.

As part of their ongoing efforts to build sustainability programs to address environmental and social problems and governance systems to address issues brought about by globalisation, as well as to utilise digital technologies to carry out reforms, companies have been particularly focused on accelerating digitalisation and implementing quick and accurate decision-making.

In addition, the Tokyo Stock Exchange plans to revise its market segments in April 2022, and the demand for change, from both investors and markets, is on the rise.
Under these circumstances, it is only natural that private equity is further increasing its presence in Japan since it creates corporate value by expediting and deepening reforms.
Private equity can also be prescribed effectively to stimulate the non-core businesses of large companies when investing additional resources is not feasible, or to deal with the problem of business succession when a business has no successor.

This report analyses three trends in the private equity market in Japan: investment trends, exit trends, and fundraising trends. It also explores future opportunities and provides recommendations on how Japanese companies can utilise private equity funds, with a focus on carve-outs and business succession.