private equity in Japan

BusinessWeek has an article on the private equity market in Japan. Basically the article says that there is too much money chasing too few deals.

Plus, Japanese government intervention means an uneven playing field for the foreign PE firms who would like to take over a Japanese company.

It turns out that it’s not so easy to pull off a big-ticket buyout in Corporate Japan. So far this year the flow of fresh deals has slowed — just 39, vs. 52 a year ago, says Thomson Financial. And the value of private-equity buyouts is at $1.4 billion, vs. $2.1 billion this time last year. At that rate, the market will be hard-pressed to top the $7.5 billion rung up last year, or even the $6 billion in 2003. “All the signs are that there’s too much money chasing too few deals,” says C.J. Wilson, founder of Global Alliance Ltd., an M&A investment advisory firm.

Anyone in private equity in Japan have any thoughts on this? Anonymous comments are fine (just make up a name/email.)

Japan: Let’s Not Make A Deal []

1 Comment on “private equity in Japan

  1. How much “small business” is there in Japan? Private equity (either buyout or venture) is best applied to modestly sized organizations. Jumbo conglomerates tend to be too large to digest, and sole proprietorships are too small to attract attention of all but the smallest shops.
    I don’t know the Japanese landscape very well, but it seems like it’s driven primarily by larger corporations and possibly very tiny organizations. There’s not much room in the middle where PE does the most work.