Japan Rising

Dominic Carman

The land of the rising sun has finally re-appeared on the investment horizon, as offshore law firms beat a path to Tokyo in search of golden opportunity

As the lure of China continues to recede, at least for now, so attention continues to focus on Japan. After more than three decades of economic and market stagnation, investor interest has been reignited by the opportunities presented in the world’s fourth largest economy. Offshore lawyers, particularly in Hong Kong, are enthused by Japan’s paradigm shift and the growing stream of advisory work on behalf of financial clients, which is keeping many of them increasingly busy. The Head of Carey Olsen’s Hong Kong office, Michael Padarin, offers an institutional investment and fund perspective on the state of play in Asia. “Historically, a pan-Asian fund might have invested 90% in China and a smattering across Japan, Korea, India,” he says. “They’ve shifted: some funds are deploying 10% in China and much bigger chunks in Japan, Korea and India. We’ve seen a real uptick in Japan. Other economic factors are at play: lower interest rates and a depressed Yen make assets fairly cheap. We’ve shifted our focus: much less on China and working on deals in these jurisdictions. The Japanese market for investment fund formation, and for deals getting done by funds, looks pretty bright.”