Deal volume to continue growing in Japan, with buyouts as the main deal type 

It’s often said in private equity that dealmakers don’t do uncertainty. Japan provides welcome relief. In the years following the global financial crisis, right through the pandemic, a steady year-on-year climb in deal volume runs counter to many comparatively more mature global markets. Our data this week hints at a market being slowly unlocked by international dealmakers, as well as Japanese investors’ growing appetites. We cover this in more detail in Fundraising from Japan: A Guide to Raising Capital.

Yet Japan’s total deal value by year paints a very different picture, peaking in 2017 with aggregate deal value of $27bn before crashing by 93.7% in 2018 – only showing four years of growth in the period. However, this may be about to change. From 2021 to 2022, deal value dipped by only 6.6% as volume continued to grow, with buyout the main deal type. This will likely continue into 2023, especially considering the Toshiba buyout proposal. The Japanese market may still be impacted by the global slowdown in deal activity, but there is still potential for dry powder deployment if Japanese megabanks are willing to continue to take risks.   

Download Trending Data: Japanese private equity searches for a groove for a closer look at the data.