Press Article

Spotlight on Japan: Is the wait really over?

Change is in the Air for Japan’s PE Market

The CEO of fundraising advisor MVision discusses the evolution of private equity in japan.

MAY 2016

Privcap: Why is Japan so underpenetrated by private equity?

Mounir Guen, MVision: The difficulty was always access to deals. It wasn’t lack of local strength and local private equity capabilities. But when you look at Japan today, it's really changing in my view. There is a lot more entrepreneurialism. There’s a lot more open-mindedness. And that is starting to get into the system.

How big is the potential PE deal opportunity in Japan?

There are about 3,400 listed companies in Japan. They have 40,000 departments that could potentially be candidates for private equity. Now, it’s not as if private equity doesn’t have good rhythm. They do about 40 to 50 deals per year, which is pretty good, but the ability to have that type of ownership positioning and create the value is more in the mid-market, as in the smaller deals.

Can you talk about the evolving LP community in Japan?

Change is in the air. Both at the large and small end, the number of LPs in alternatives is increasing dramatically. They’re learning faster about other LP programs. They are bringing in advisors and consultants to review their programs.

And I think that today they’ve opened by necessity because they need returns. And having opened up to private equity, they’ve uncovered a fantastic performing community that’s very receptive and happy to share information.

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