COMPANY

February 2024

In 1997, Advantage Partners established Japan’s first private equity fund and has been growing steadily since.

2023 will likely prove to be a turning point for growth in the domestic M&A and PE markets. According to MARR, which has compiled data on M&A activity from 1998, the total deal value of fund backed M&A of Japanese companies recorded an all-time high for the second year in a row in 2023, reaching JPY 5.3 trillion, surpassing the 2022 record of JPY 4.1 trillion by 30.5%. 2023 saw MBO deals worth hundreds of billions of yen, as well as an M&A transaction valued at over JPY 2 trillion. The Japanese PE market, over a quarter century after its founding in 1997, has now entered an era of strong growth and is likely to be on course to catch up to the European and US markets.

The 4 factors outlined below have worked in tandem and are largely responsible for the sudden growth of the domestic PE and M&A markets:

・The prevalence of take private and carveout deals in the middle market over the past 25+ years that have made M&A a viable option among many companies, executives, and founders

・Global PE firms allocating higher amounts of capital to Japan in response to this trend

・The Tokyo Stock Exchange’s latest corporate governance code that looks to restructure its public markets has led to increased take private deals

・An increasing trend among activist funds to push listed companies to go private

These factors are promising trends with long lasting impacts that will bring a period of strong growth in the Japanese M&A and PE markets.

Advantage Partners’ respective strategies exhibited stable growth in 2023.

The Japanese Buyout Fund completed 6 exits and made 1 new investment, while its latest vintage, Advantage Partners Fund VII, successfully closed with total commitments of JPY 130 billion. Advantage Partners also won the “Exit of the Year – Small Cap” award, and the “Fundraising of the Year – Mid Cap” at the Asian Private Equity & Venture Capital Awards. We would like to express our sincere gratitude to those who valued our efforts and voted for us at these awards.

Asia Fund I, established in 2016, has finished investing and has begun the exit process for many of its portfolio companies.

The Private Solutions strategy, which supports the growth of listed companies in Japan, has now completed 30+ investments over its 15-year history.

The Renewables and Sustainability Strategy sponsored a NYSE listed SPAC that recently signed a business combination agreement with JEPLAN, INC. Advantage Partners further agreed to collaborate with the Japan Hydrogen Association to establish a fund focused on investments in the Hydrogen Value-Chain. Going forward, further developments are expected from this strategy.

The beginning of 2024 was marked by two tragedies in Japan, the Noto Peninsula earthquake on New Year’s Day, and the collision at Haneda Airport between Japan Airlines Flight 516 and a cargo plane operated by the Japan Coast Guard. We would like to express our deepest condolences to the 241 people who lost their lives in the earthquake, the 5 members of the Japan Coast Guard who lost their lives in the crash, and the families of the deceased.

Geopolitical tensions in the world remain high as the Russo-Ukrainian War rages on and renewed hostilities between Israel and Palestine have resulted in thousands of deaths. Goals for CO2 reduction have been postponed and climate change is expected to further result in irregular weather patterns across the globe.

Under such conditions, Advantage Partners will continue to debate and evaluate its position as a global private equity firm in order to maximize its impact on global development and growth and deliver outstanding results to all stakeholders.

Representative Partners
Taisuke Sasanuma, Richard Folsom