Private equity buyers may find their next wave of deals in Japan, South Korea, and Australia, according to Goldman Sachs Asset Management executive Stephanie Hui. Speaking Thursday at the Reuters NEXT Asia event in Singapore, Hui said those three markets are showing the most promise for buyout activity as sellers warm to divestments and financing conditions stabilize.
“Japan, South Korea and Australia offer a lot of buyout opportunities,” said Stephanie Hui of Goldman Sachs Asset Management.
Her comments come as investment firms scan Asia-Pacific for larger control deals, even as higher interest rates and tighter credit challenge valuations. Investors are reassessing where corporate change, governance reforms, and currency moves may create openings over the next 12 months.
Shifting Market Backdrop
Private equity deals slowed worldwide after central banks raised rates, making leveraged buyouts more expensive. Asia-Pacific was no exception. Yet regional dealmakers say certain markets remain active, helped by corporate restructuring and strong cash flow in select sectors like industrials, healthcare, and technology services.
Japan has drawn steady attention as boards respond to pressure for higher returns and more efficient balance sheets. A weaker yen has also made assets cheaper for dollar-based buyers. South Korea continues to see carve-outs from large conglomerates and succession changes that bring non-core sales to market. Australia, supported by deep pools of pension capital and clear rules for takeovers, has long been friendly to private equity bids for mid-to-large companies.
Why These Three Markets Stand Out
Investors point to a mix of governance progress, seller readiness, and financing access. Each country offers distinct drivers that may suit control transactions.
- Japan: Corporate reforms and share price pressures are spurring spin-offs and management buyouts.
- South Korea: Conglomerate portfolio reviews and generational shifts create divestment pipelines.
- Australia: Predictable regulation and active domestic capital support competitive bidding for quality assets.
Hui’s assessment aligns with what many funds report in deal pipelines. Control deals often hinge on operational value creation rather than high leverage. That has pushed buyers to focus on margins, digitization, and carve-out execution. In these markets, private owners and boards appear more open to those playbooks than a few years ago.
Financing, Valuations, and Policy Risks
Debt costs remain a key swing factor for buyouts. While borrowing rates are higher than during the ultra-low era, lenders in Japan and Australia have shown ongoing appetite for cash-generative targets. In South Korea, local banks and credit funds are active, but terms can tighten quickly if growth slows.
Valuations vary by sector. Industrial technology and critical services still command premiums, while consumer names are more mixed due to cost pressures. Currency moves add another layer of complexity. A weak yen can help dollar investors in Japan, but sudden shifts can also change returns.
Regulation is another watch point. Foreign investment reviews in Australia, antitrust scrutiny in South Korea, and national interest concerns in sensitive technologies can add time and uncertainty to deals. Seasoned buyers now plan for longer approvals and broader remedy packages when needed.
Multiple Views on Deal Momentum
Not everyone expects a swift rebound in large LBOs. Some investors argue that pricing has not fully adjusted to higher financing costs, keeping a gap between buyers and sellers. Others say secondary buyouts, corporate spin-offs, and take-privates will continue to move ahead, especially where performance improvements are clear and cash flows are stable.
Advisers note that partnerships with strategic buyers are more common, sharing risk and capital. Minority protections and earn-outs are also used to bridge valuation gaps. In Japan and South Korea, joint bids with domestic allies can improve certainty of execution and address regulatory review.
What to Watch in the Year Ahead
Market watchers will track central bank paths, loan market liquidity, and corporate governance signals. A softening in rates could widen the pool of feasible deals. Continued board pressure in Japan and ongoing portfolio reviews in South Korea would keep supply flowing. In Australia, steady pension fund participation and clear regulatory processes should support competitive auctions.
Hui’s remarks point to a practical takeaway: control deals in Asia-Pacific are likely to center on operational upgrades, clean carve-outs, and disciplined financing rather than heavy leverage. For investors, the focus will be on durable earnings and clear value-creation plans. For sellers, the appeal lies in certainty, speed, and credible operators.
As buyout firms weigh these conditions, Japan, South Korea, and Australia look set to anchor the region’s next phase of activity. The balance between rate moves, currency shifts, and boardroom decisions will decide how quickly that promise turns into signed deals.
