Amid rising investor demand, private equity & venture capital (PEVC) assets under management aimed at Japan rose to a record $68bn at the end of 2020. The figure, more than double that of three years ago, highlights the growing appeal of PEVC assets in the country, driven by the robust risk/return profile on offer. As Preqin data shows, for fund vintages 2008-2018, the median net IRR of Japan-focused PEVC funds comes in at 21.0%, with standard deviation of 11.6% – comparing favorably to North America-focused funds on both counts.

Although still early days for PEVC in the world’s third-largest economy, there’s ample opportunity for private equity participation to tackle some of Japan’s key economic challenges. For instance, with Japan’s aging population presenting an acute need for reform and growth, and succession issues in SMEs, the domestic buyout market is one of the most attractive in the world right now. 

Preqin Alternative Assets in Asia-Pacific: Japan combines the latest data and analysis with expert insight from local industry leaders to explore how the PEVC, real estate, and renewable energy asset classes are developing in Japan. The report also features the latest performance benchmark update targeting Japan-focused venture capital funds, produced in close partnership with the Japan Venture Capital Association. 

A Japanese language version of the report is available here.