Valuation gap slows private equity exits in Japan in H1 2026

Jeremy White and James Beach spoke with S&P Global Market Intelligence about data showing private equity exits in Japan declined in volume during the first half of 2026 despite a sharp increase in total exit value, driven by larger transactions.

Jeremy said the lower exit count should not be viewed as a negative trend, explaining that Japan's private equity market is still maturing and that increased exits naturally lag a recent surge in investments.

"Japan has been experiencing a ramp-up in private equity investments, which is recent compared to other jurisdictions. It is natural, therefore, for a number of years to elapse before seeing a meaningful increase in exits," Jeremy said.

He also highlighted corporate governance reforms as a driver of industrial carve-outs and predicted exit activity will accelerate as sponsors divest assets acquired over the past three to seven years. White added that a more stable yen could unlock additional cross-border trade sales.

James contrasted Japan with the U.S., noting that the U.S.'s more developed continuation vehicle and secondaries markets provide sponsors with additional exit options. "The US has structural exit-pressure valves that Japan largely lacks," said James. He also explained why trade sales continue to outpace IPOs, offering greater certainty and fewer post-closing risks for private equity sponsors. 

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