HomeFinance NewsFinanceJapan's Private Equity Boom: Investors Cash In as Value Skyrockets 183%

Japan’s Private Equity Boom: Investors Cash In as Value Skyrockets 183%


Japan bucks private equity slowdown in Asia Pacific with deal value soaring 183% last year


The overall value of private equity deals in Asia Pacific experienced a significant decline of over 23% in 2023, reaching $147 billion, according to a report by Bain & Company.

This represents the lowest level since 2014 and a sharp drop from the peak of $359 billion in 2021.

However, Japan emerged as an outlier, with its deal value surging by an astonishing 183% year-over-year.

This surge made Japan the largest private equity market in Asia Pacific for the first time.

Bain attributes this growth to Japan’s deep pool of investment targets, the pressure on companies to dispose of non-core assets, and ongoing corporate governance reforms.

Exits, or the processes through which private equity firms sell their investments, also saw a decline of 26% to $101 billion in 2023.

Notably, 40% of these exits occurred through initial public offerings (IPOs), with Greater China accounting for the vast majority.

Excluding Greater China IPOs, the total Asia-Pacific exit value amounted to $65 billion.

Bain predicts that the outlook for exits in 2024 remains uncertain.

However, successful private equity funds are proactively implementing strategies to enhance the attractiveness of their deals to buyers, thereby paving the way for sales that achieve targeted returns.

Despite the overall decline in deal value, Bain emphasizes that private equity returns continue to outperform public market investments over the long term.

Leading private equity funds are also exploring alternative asset classes, such as infrastructure operations involving renewable energy, data centers, and airports, which offer attractive risk-adjusted returns.

Bain highlights several key trends to watch for in the Asia-Pacific private equity market: – Buyouts are taking the lead, indicating a shift from high-growth companies to value-oriented investments.

– Japan, India, and Southeast Asia are viewed favorably for private equity opportunities in the next year.

– Disruptive technologies like generative artificial intelligence hold promising prospects for private equity investments.

  • Overall sentiment: negative
  • Positive

    “Japan though, was an outlier, with deal value jumping 183% in 2023 from a year earlier, making it the largest private equity market in Asia Pacific for the first time, according to Bain’s 2024 Asia-Pacific Private Equity Report released Monday.”

    “Despite a declining pool of investors, Bain said private equity returns are still more attractive than those from the public markets on a five-, 10 and 20-year horizon.”

    “When the recovery does take effect, disruptive technologies such a generative artificial intelligence are among new areas that hold “great promise,” Bain added.”


    “The total value of private equity deals in Asia Pacific last year fell to its lowest since 2014 as fundraising dropped to a 10-year low amid slowing growth, high interest rates and volatile public markets, according to management consultancy Bain & Company.”

    “Overall, deal value in the Asia-Pacific region declined more than 23% to $147 billion from a year earlier. This is also 35% below the 2018-2022 average value — a pace of decline that’s consistent with the global slowdown — and nearly 60% lower than the $359 billion peak in 2021, Bain said.”

    “Exits plunged 26% to $101 billion in 2023 from a year ago — of which 40% were via initial public offerings.”

    “The timing of a recovery still remains unclear, Bain said, even though there were signs of some improvements toward the end of last year.”

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