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Focus on Japan: what are the key themes for PE and VC investors?

Looking ahead to our first ever SuperReturn Japan in Tokyo, we explore three key themes that will be discussed at the event - from increased activity in private equity to the growth and expansion of venture capital in the Japanese market.

The Japanese market: a surge of activity

The Japanese PE market is seeing a lot of momentum on both the GP and the LP side and acceptance of the industry is starting to take root. The opportunities arising out of carve-out transactions and the huge volume of succession deals are creating a more robust market. And influential Japanese LPs such as GPIF and Japan Post are starting their own programmes with a number of others looking to follow their lead. The opportunity set is growing but so are the number of GPs wanting a slice of the action. Competition is getting fierce and valuations are increasing. A number of global GPs are setting up offices in Tokyo and deploying a significant amount of capital into the Japanese market. It’s not just the global firms that have had huge fundraises, but local players have also substantially increased the size of their latest funds. The coming years will be crucial to determine if the market has enough depth to sustain the amount of capital that has been raised in recent years.

Industry experts from Asia Alternatives and Tokyo Marine Capital will take to the stage to assess the state of the market today.

The search for yield: LP activity in and out of Japan

From insurance companies to pension funds and family offices: Japanese LP activity is on the rise as huge pools of capital increase their allocation to private equity both inside and outside of Japan. And the regional banks are no exception. There has been a significant increase in the number of regional banks participating in the private equity market over recent years with banks acting as LPs and collaborating with private equity funds. The low interest rate environment means that regional banks are having to look further afield in their search for yield and private equity is an attractive offer. The regional bank model is also under pressure as more and more of the country’s wealth and economic activity is concentrated in the cities with fewer people living in the rural areas served by the regional banks.

It’s not just the banks that have been affected by the negative interest rate – other LP groups are looking at alternative ways to fill the gap left by a traditional fixed income portfolio. Buyout remains a huge focus but LPs are looking at other options on the margins of their portfolios and real estate, private debt and infrastructure are all viable options.

Don’t miss the experts on how they create a developed and diversified programme.

Venture capital: where is the benchmark?

Venture capital is something of a new concept for the Japanese market and it hasn’t traditionally been a real asset allocation for investors. That is gradually changing, and the new generation of VCs are starting to get traction in the market and a few are even starting to secure capital from institutional investors. There are only a small number of successful players in the venture capital space and so there is no real benchmark or set of industry standards that institutional LPs can look to. The startup ecosystem is booming in Japan and corporates investors are increasingly active in the venture space, so much so that is something that’s quite unique and key to the Japanese market. This new version of venture capital is more akin to what we see elsewhere in the world so Japan can learn from the more developed venture markets and hopefully we will start to see LPs become more active in Japanese venture capital.

Understand how the market has evolved with our expert panel.

We look forward to seeing you there!

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