Goldman Sachs Identifies Australia Among Top Buyout Markets
Synopsis
The asset manager says private equity opportunities remain strong across Australia, Japan and South Korea, while investors also focus on AI-enabled businesses.
Key Highlights
- Japan and South Korea are singled out with the Goldman Sachs Australia buyout market as tertiaries in terms of their attractiveness for M&A activity across Asia.
- Goldman Sachs Asset Management said Japan’s corporate buyout activity is still in the “early innings.”
- Changes in Japan’s corporate governance are fuelling private equity activity.
Goldman Sachs picked out Australia buyouts to prove Japan and South Korea were among the strongest in the merger, acquisition and take-private opportunities around the Asia-Pacific region. Corporate buyout and private equity activity in Japan remain “early innings,” while Japan’s stock market is positioned for consolidation, according to Goldman Sachs Asset Management’s Stephanie Hui, speaking at the Reuters NEXT Asia event in Singapore.
Corporate Governance Driving Buyout Activity
Due to changes in corporate governance rules that have driven companies and boards to increase returns for shareholders over the last three years, Japan has become an increasingly active playground for foreign private equity firms.
K.K.R. made a move to take Taiyo Holdings private, while Bain Capital and SoftBank’s LY Corp are competing with EQT for Kakaku’s business in a number of recent deals. com.
Hui pointed out that Japan has roughly 4,000 listed companies while Americans have around 5,000 even though the U.S. economy is six times bigger than Japan’s. She also pointed out that Germany, with a GDP roughly the same size as Japan, has around 400 listed companies.
Large Companies Attract Private Equity
Hui stated that many of the existing companies in Japan generate more than US$1 billion in annual revenue each year, which is why they are so attractive to foreign private equity firms.
Increased private equity activity has prompted companies to focus on operational efficiencies ditching some of the bureaucracy and other checks and balances with a view towards creating shareholder value, she said.
At the same event, Bain Capital Japan Chief Strategist Satoshi Ueyama told that the company would focus on identifying which businesses will benefit from AI, specifically in service industries and consumer applications. He added that in addition to opportunity, not all AI investments will succeed.
Source: Reuters
Follow Inspirepreneur Magazine for daily global business news.
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
You Might Also Like
Mastering Consistency: The Path to Success in a 30-Day Challenge
UK Signs $468 Million Deal to Supply India with Lightweight Missiles
