While the Japanese economy has been experiencing a sustained, gradual recovery, there are still many Japanese companies which content themselves with low growth and profitability amid a backdrop of population decline, aging society, rising social security costs and other social challenges. The current government administration has implemented various initiatives in working towards overcoming such social challenges as well as raising Corporate Japan’s overall competitiveness and profitability. These include initiatives to strengthen corporate governance, stimulate the equity markets, and supply risk capital through pension funds and other institutions. Such efforts have had the collective impact of creating the momentum for a positive economic cycle.

The private equity industry has seen these positive changes through a recent resurgence in activity – in both succession deals of mid-to-small-sized family-owned enterprises as well as in spinoffs of noncore businesses by large corporations. Nonetheless, the private equity industry in Japan remains significantly behind its western counterparts in scale and recognition, suggesting that it is still in a developmental stage.

We believe that the private equity firms which constitute the JPPE are better than ever positioned to support value creation in their portfolio companies, providing necessary growth capital, management resources, and governance – and thereby can help to expand and raise awareness for the Japanese private equity industry. Moreover, through achieving enterprise value creation, these private equity firms can not only provide attractive investment returns to domestic investors but also attract foreign risk money, serving a central role within the economic cycle.

We appreciate your guidance and support so that we may continue to contribute to the development of the private equity industry in Japan.