(Bloomberg) -- Top executives at KKR & Co. and Blackstone Inc. said private equity is in its infancy in Japan, and there’s ample room for buyout firms to grow.
“Japan is a must-own country today for investors,” KKR Co-Chief Executive Officer Joe Bae said Monday at a Bloomberg panel discussion with Japanese Prime Minister Fumio Kishida. The country is the biggest destination for KKR’s capital after the US, Bae said.
As dealmakers find new ways to tap funding beyond bank-led financing, this will fuel more investment in Japan, he added.
Blackstone is drawn to the country as it opens its economy to more financial players. Another draw: The investing landscape isn’t as crowded as the US or Europe, President Jon Gray said at the event. The alternative asset manager expects to make about $20 billion in real estate and corporate investments in the country during the next three years, which the firm sees as a “significant” push and a reflection of Japan’s opening up, he said.
KKR’s Bae, seated next to Kishida, said that continued market reforms will keep investors committed to Japan for the long haul. He flagged tie-ups with Japanese insurers as one way private equity firms could deepen ties to the country.
Japan has $13 trillion of deposits and annuities generating low returns for savers, according to Bae. That money could be moved to other investments, he said — presenting an opportunity for asset managers.
The country is the second-biggest market for annuities after the US, and KKR already has partnerships with several Japanese insurers.
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