North Asia, consisting of Asia’s second and fourth largest economies in Japan and South Korea respectively, is home to some of the most active private equity firms in the region. Preqin’s Fund Manager Profiles online service currently tracks 195 North Asia-based private equity fund managers, of which 62% are based in Japan and 38% are headquartered in South Korea. These GPs have raised $59bn collectively over the last 10 years and have an estimated $15bn in available dry powder, with Japan-based fund managers having raised 53% of the total amount of capital and holding $6.4bn in dry powder.
The number of private equity firms in North Asia constitutes 18% of all GPs headquartered in Asia. The percentage of capital secured by North Asia-based managers reached a peak in 2013 when Japan- and South Korea-based GPs raised 31% of all Asia-based funds by number and 25% of total capital.
In terms of fund type, a significant proportion (66%) of North Asia-based GPs favours the venture capital strategy. The next most utilized strategy is buyout – 36% of the GP pool targets such opportunities. This is followed by growth (32%) and distressed opportunities (16%), which include distressed debt, turnaround and special situation strategies.
The majority (45%) of fund managers headquartered in North Asia target their domestic markets exclusively. For the rest of the firms, 44% are interested in the Greater China region, 37% prefer North America and 23% express an inclination towards opportunities in the ASEAN market.