Japan looks compelling again for private equity

EVEN though Japan is a leading market in Asia alongside China, India and South-east Asia, investors have been reluctant to consider it as a core geography in their private equity allocations over the past few years.

The main reasons? Only a few deals are effectively closed each year, portfolio company growth was confined by a flat economy, and returns have been somewhat below expectation.

Nevertheless, different factors seem to be improving the investment environment. While Japan is still lagging behind emerging economies across Asia, it seems to be able to achieve positive growth going forward. Japan is starting to look compelling again for private equity investors lured by the government's economic policy shift, so-called "Abenomics".