A recent Nikkei article 2 highlighted the ongoing growth in private equity transactions in Japan, supported by a number of new entrants to the market, other firms returning after a long absence, and large new fundraisings. Bain Capital’s gigantic US$15bn estimated profit on its Kioxia deal can only add to investor demand for Japanese PE exposure.
In November 2025, Warburg Pincus opened an office in Tokyo for the first time since the 1990s, and in June 2026 announced the ¥200bn acquisition of a student housing operator. Advent International, re-entered after 15 years and plans to buy a nursing home company for ~¥200bn. A US firm KPS Capital Partners plans to open a Tokyo office in 2027, European player Aurelius opened an office in Tokyo in June.
218 deals were completed in 2025, up 18% vs 2024.
Bain Capital has raised US$10.5bn for its latest Asia Fund. A large share of that money is likely to be invested in Japan given China is effectively off limits these days. Reportedly, this fundraising was bolstered through Bain requiring investors wanting access to its high-returning Japan mid-market fund to commit 3-4x the desired investment amount to the Asia Fund. The mid-market fund recently closed its raise of around US$2bn. Korean firm MBK raised $5.5bn in 2025 for its Asia Fund, of which ~45% is earmarked for Japan. Carlyle raised $2.8bn for its Japan fund in 2024. KKR is targeting a US$15bn close for its Asia Fund, most of which will be invested in Japan. EQT closed a $15.6bn Asia Fund in early 2026, with Japan as a key target market.
Local Japanese funds are also getting in on the action. NSSK closed US$1.7bn in March, Integral Corp closed its fifth fund at US$1.6bn in mid-2024, Japan Industrial Partners raised ¥314bn in 2024, and Advantage Partners – backed by Australian publicly-listed GP-staker Pinnacle Investment Management, closed US$2.1bn in May 2026.
We have written previously about the symbiosis between activist funds and private equity. Activists provide a steady source of deal flow for funds with not enough of it relative to the capital they have to invest. This dynamic means there is almost always a ready buyer for any public company that explores a sale. Many management teams become more willing to privatise after facing activist pressure to improve performance.
A recent case study illustrates the increased willingness of PE firms to act more aggressively to win deals.
In May, EQT and Digital Garage launched an agreed takeover bid for Kakaku.com – operator of its eponymous price comparison website, but also owner of leading restaurant review and bookings platform Tabelog. The consortium bid ¥3,000 per share or ~US$3.8bn.
Following the announcement, a consortium of Bain Capital Corp revealed a competing proposal, later disclosing a bid at ¥3,232 per share, conditional on support from Kakaku.com, which the company said it would consider. This month the consortium announced a revised bid at ¥3,384 per share, but indicated this could be raised to 3,500 if major shareholder KDDI (17.7%) agreed to support it. This caused Kakaku.com to remove its support for the EQT deal.
Complicating matters for Kakaku.com, Digital Garage owns 20.6% of the company, but activist Oasis Management also owns 17.2%. Oasis is clearly incentivised to pursue the highest-priced transaction, while Digital Garage wants to get the deal as cheaply as possible as it plans to reinvest to maintain its 20% stake. Oasis previously owned a large stake in Digital Garage, which it sold to Resona Bank at a much higher price than Digital Garage’s current trading level.
KDDI’s motivations are somewhat unclear. It agreed not to tender into EQT’s bid, but to exit via a buyback after deal completion. This structure allows for favourable tax treatment for KDDI. The company has been selling down “strategic” shareholdings, but it has also executed deals to allow it to bundle services and access consumer data – such as its purchase of a stake in Monex’s cryptocurrency exchange Coincheck Group. This is a wider trend in the telco space, with Monex also selling a 49% stake in its retail stock brokerage operations to NTT Docomo.
On 17 July, EQT raised its offer to ¥3,450 and extended its tender offer deadline to the 3rd of August.
This is all to the benefit of Kakaku.com’s minority shareholders, but highlights that private equity firms are taking off the gloves in Japan. Previously, such public takeover battles have only occurred where either there was a defect in the process – eg: Fuji Soft, where the activist ran the sale process rather than the company, which Bain saw as improper, or where an activist forced the company to run a process to seek alternative bids to an agreed deal – eg: Mandom, where CVC and KKR ended up in a bidding war.
In the Kakaku.com case, it appears that Bain felt comfortable launching a higher bid simply because the company was now “in play”. This is unheard of for PE firms in Japan, but there is precedent in the last 5-6 years, with strategic acquirors having been willing to come in over the top with a higher bid where a privatisation deal had previously been agreed with another strategic acquiror – eg: DCM Shimachu / Nittori.
Bain’s increased aggression in recent years is likely a function of the ongoing corporate governance reform, plus the need to deploy the large amounts of capital it has raised.
This developing dynamic is prospective for activist fund returns going forward.
