Getting in to a Private Equity firm is a popular desire for many Investment Banking, M&A and Consulting professionals. With firms in Tokyo varying in culture and size it can be a difficult career decision to chase due to the small volume of hiring.
Private Equity in Japan
Is a small and well connected market with limited hiring as many of the firms based in Tokyo operate with small teams that have minimal staff turnover. Typically waves of new hiring in the market happen around the time a firm is fund raising and the positions available will often be at Analyst/Associate level.
Since 2018 there has been an increase in activity in this market with new PE firms establishing offices in Tokyo and numerous PE firms raising fresh capital for Japan focused funds.
The firm's investment strategy is an important factor to consider when deciding to move into Private Equity as this can determine how your day to day responsibilities can vary, some of the examples we have seen are:
Small-Mid Cap Investor: There is more deal flow in this sector so candidates will be able to get more experience closing and exiting deals. Additionally it is often the case that you will need to be more involved in the portfolio companies you invest in.
Example firms include = Unison Capital and Advantage Partner
Large Cap Investor: As you can expect there is less deal flow in this sector and typically each deal opportunity that comes available is heavily competed for so there can be long stretches without closing. However this will offer different experiences as the deals will have more moving parts and often require working with various stakeholders globally. Additionally the Investment teams do not usually get involved with portfolio operations after closing as many funds have dedicated teams for that.
Example firms include = Blackstone and KKR
Public-Private Funds: If you are wanting to invest overseas these funds are typically the best option to do so. In this sector the deals are typically co-investment or minority investments.
Example firms include = Cool Japan Fund and INCJ
Deal Examples
Research the Market
A great way to get insights on building a career in the Private Equity industry in Japan is to research current professionals and their backgrounds, you can do that by looking through company's People/Team pages, for example:
Unison Capital = https://www.unisoncap.com/en/team/
CVC Capital Partners = https://www.cvc.com/people/directory (Filter to Tokyo)
MBK Partners = https://www.mbkpartnerslp.com/category/team/
Compensation
This can vary widely from firm to firm and previous compensation is often taken into consideration, however some global firms will have rigid salary bands like investment banking.
Understanding the total compensation structure is the most important as bonuses can make up a large portion of the total. Some companies will offer carried interest to all levels of their investment staff, so if the company you are applying for doesn't then it is useful to find out at what level that component get included.
As a snapshot of what we see for salaries in the market:
Private Equity Analyst = 8-12M JPY Base Salary + Bonus.
* 1-4 years relevant working experience
Private Equity Associate = 8-15M JPY Base Salary + Bonus
* 3-7 years relevant working experience