Carlyle predicts surge in post-pandemic deals in Japan

Carlyle’s head of Japanese operations predicts a surge in private equity trading. Business environment after the new corona Also, as the pressure on companies to achieve carbon neutrality increases, a wave of acquisitions and spin-offs will rush.

In an interview with the Financial Times, Kazuhiro Yamada said the pandemic accelerated the sale of assets and the purchase of new technologies among Japanese companies that may have previously taken years to make such a decision. Said that.

“Consumer behavior and [the] As a result of Covid-19, the business model has changed dramatically, forcing the hit companies to undertake structural reforms, “said Yamada, who said cheap funding from Japanese megabanks was for private equity. He added that the environment was particularly attractive.

The post-pandemic boost will be built on the excitement of attracting the world’s largest private-equity fund to Japan. Several groups, Including KKR, We believe this country is the most open market outside the United States.

While the average size of PE transactions in Japan is increasing, Carlyle is focused on small transactions, often involving companies that have been negotiating for several years. Carlyle has been in Japan for over 20 years since 2000 and has invested over $ 3.2 billion in 27 Japanese companies.

Bain & Company, a consulting group, calculated As of the end of 2020, private-equity funds held a record $ 477 billion in unused capital focused on the Asia-Pacific region.

Private-equity trading activity slowed in the first half of last year, but Yamada said the pace was accelerating in 2021.

According to Dealogic, Japanese companies had 25 private equity and other similar types of investments this year worth $ 8.6 billion, compared to $ 9.5 billion in 2020 and $ 10.3 billion in 2019. ..

Large companies such as Hitachi Panasonic will continue to be under pressure from shareholders to sell its non-core assets, Yamada said. But he said that about half of Carlyle’s trading pipeline Inheritance problemDue to the oversupply of retirees in the enterprise, many have begun to consider options that were previously unlikely, such as selling to private equity.

Source: California News Times