Exploring Japan's Evolving Investment Landscape: Private Equity Funds

This article forms part of a series of articles examining the opportunities Japan presents for investment managers and investors. This article focuses on private equity funds¹ and the Cayman Islands exempted limited partnership.

Japan's flourishing PE market

Japan has been the largest and most active private equity ("PE") market in APAC since 2023² (Fig 1). PE related dealmaking in Japan jumped last year as ample supply of targets, low interest rates, a weaker Japanese Yen and improved corporate governance helped Japan buck the trend to make the country the only market in APAC to see growth in 2023³ and dealmakers anticipate a busy pipeline ahead.⁴

There is a growing number of investors chasing deals in Japan. The number of General Partners ("GP") with a Japan office and a latest buyout/turnaround fund that is more than or equal to JPY 50 billion have doubled between 2012 and 2024, with more domestic GPs growing to this size. There is also a large group