Why is Private Equity Investment in Japan Attractive?


Japan equity market is one of the most attractive equity markets in Asia Pacific. The country has excellent political stability and good governance. In addition, low valuations make this market even more attractive. Therefore, it is perfect for investors to make equity investment in Japan.

The country offers various types of equity investments, such as mutual fund investments, stocks, and private equity investment or often referred as PE investment. Many people think that PE investment needs large capitals, but investors can actually invest smaller capitals via start-up companies.

What Makes Private Equity Investment in Japan Attractive

The covid-19 pandemic affected most industries in Japan, including equity investment. This pandemic has caused uncertainties in the market that result in falling stock prices. However, PE firms in Japan remain optimistic in facing this uncertain condition.

There are several facts that make PE investments remain attractive.

  1. Resilient

Japan is a resilient country. Investors can find various proofs that show how resilient the country is. In 2011, for example, the country was able to recover quickly after the earthquake and tsunami. Another proof can be seen from the Japan’s automotive industry after the pandemic.

Japan’s automotive industry has already shown a positive trend toward recovery in Q1 2021. The country has a large domestic economy and unique culture that seems never to change. These characteristics help Japan industries to recover from difficult conditions quickly.

  1. Private Equity is a Long Term Investment

PE is a long-term investment. Today, the investment market may suffer from some uncertainties. However, the future may promise a better investment environment. Therefore, there is a possibility that PE firms will get high ROI in the future if they make an investment in Japan now.

  1. Room for Growth

Many companies in Japan have ample room for growth. As a result, PE firms have a big opportunity to grow their portfolio companies into a profitable company.

  1. Lower Valuations

The general public valuations on Japanese companies are quite low. In consequence, PE firms will be able to buy companies at a lower cost and sell them at a much higher price in the future. As a result, they will gain higher ROI from their PE investment.

How to Make Profitable Equity Investment in Japan

Creating a profitable equity investment in Japan is not an easy task, especially for foreign PE firms that never made a PE investment in Japan before. To ensure the success of this investment, PE firms can hire a Japanese PE investment consultant.

Information on private companies is often not readily available for investors or PE firms. However, with the help of this consultant, they can find various and accurate data on the companies they want to invest in. As a result, these investors can create the best and most profitable PE investment in Japan.

Foreign investors or PE firms who want to enter the Japanese PE investment market need to make sure that they get the best assistance from a top PE investment consultant so that they can gain maximum profit from their investment.

The Japan PE investment market is very attractive. It offers profitable opportunities for both local and foreign PE firms and investors. However, seizing this opportunity is not an easy thing to do without the help of a consultant. 

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