Day 1 | Day 2
Wednesday, 26th June 2019
Registration and refreshments
Opening keynote address
The world view: Macro events and private equity
Private equity globally has been in rude health for several years, against a backdrop of a favourable macroeconomic conditions and substantial allocations to the asset class. Nevertheless, a range of issues are now making investors nervous, from US-China trade tensions to Brexit to the gnawing sense of an impending downturn. Dry powder at record levels and heady valuations don’t help matters. A panel of experienced investors assess the current market conditions, whether the industry can ride out any turbulence, and what strategies are most likely to find success.
- What will be the key investment themes over the next 12 months?
- How can private equity take advantage of potential market turbulence?
- Where does Japan fit into the global picture?
- How are products evolving to meet investors’ needs?
Japan: Finding value in a competitive market
Despite operating in an economy that is demographically challenged and unable to generate compelling growth, private equity investors have demonstrated an ability to identify the right companies in the right industries in Japan, add value, and deliver attractive exits. A range of LPs, from home and abroad, are increasingly interested in having exposure to the country, which has helped local GPs raise larger funds. Meanwhile, pan-Asian funds, primarily drawn by corporate carve-out opportunities, expect Japan to feature more prominently in their portfolios. Our panellists share their views on the investment environment.
- Is Japan poised for a stream of mega deals?
- What can investors do to gain an edge in auction situations?
- How difficult is it to implement an outbound growth strategy in Japan?
- What are the main challenges in recruiting and retaining investment talent?
Networking coffee break
Value creation: Building conviction in investments
Competition for deals is intensifying at almost every level of the market, putting upward pressure on entry multiples. As a result, operational improvement has never been more important. Private equity firms, from global buyout firms participating in auctions to midmarket local GPs engaged in one-on-one negotiations, must pursue investments with a conviction based on clear-cut value creation plans. If initiatives fall short in timing, intensity or complexity, it might be difficult to achieve the exit multiples underwritten into deals. In this session, experts offer insights into delivering alpha.
- What kinds of initiatives have tended to work best in Japan?
- What are the best ways to ensure management team buy-in?
- How is digital transformation contributing to value creation?
- How strong is the service provider community in this area?
Middle market: Strong fundamentals, evolving strategies
Aging founders, a deeper pool of intermediaries, and success stories engendering a greater willingness to do business with private equity – there are multiple forces behind the growth in middle-market deal flow in Japan in recent years. It will be intriguing to see how the latest vintage performs, given the increasing amount of capital available for deployment. Are fund sizes still in sync with an evolving opportunity set or do managers risk falling victim to indiscipline and strategy shift? A panel of experienced GPs will discuss the development of the market.
- Is the middle market becoming about more than succession planning?
- What are the prospects for more take-private deals in Japan?
- Which industries offer the best growth prospects?
- Will the increase in fund sizes on the previous vintage continue?
Lessons learnt: 20 years of private equity in Japan
The AVCJ Japan Forum has captured the growth of the industry in Japan these past two decades, charting the highs and lows. Technology pioneers, the Asian financial crisis, the arrival of international buyout firms, dotcom boom and bust, the lost decade, the global financial crisis, Abenomics – it is easy to break down history into a series of episodes. But the overriding story of Japanese private equity is the emergence of an asset class that has become an important component of the economy as well as a trusted partner for local companies. And, lest we forget, it has also generated some attractive returns for LPs. A panel of industry veterans revisits the past and looks to the future.
Networking coffee break
Hamilton Lane Presentation
LP spotlight: Engaging with alternatives
Japan’s LP community is in a state of flux, with many investors in the process of launching alternatives programs or looking to ramp up their exposure. Building a diversified portfolio is not straightforward. For many LPs, it is a case of establishing their limitations, based on team size, quantum of capital available, and investment mandate. Secondaries might be the right strategy but at the wrong time; co-investment could be a pipedream; and credit a good fit, if only someone could help identify the best managers. LPs share their experiences.
- To what extent is it difficult to access the best funds globally?
- What are the merits of multi-product GPs versus specialist GPs?
- Is there a shortage of suitably qualified portfolio managers?
- What sort of partnerships do LPs want with GPs?
What could go wrong? Dealing with black swans
There is a widely-held belief that the market has reached the peak of its cycle and the only way from here is down. But what is most likely to trigger a reset? Private equity has experienced downturns in the past, some predicted by market watchers and others unforeseen. Those with the ability to assess risk factors and prepare accordingly should be able to minimize the damage inflicted on their portfolios. In this session, a panel of experienced investors assesses the origins of previous crises and considers how the lessons learned can be applied to a range of worst-case scenarios, from natural disasters to wars to financial scandals.