Japan: thinking long term

Although Japan boasts one of the world’s most developed and technologically advanced urban landscapes, it is also exposed to devastating natural catastrophes such as the 2011 earthquakes and tsunami, which in turn justify substantial investments in enduring infrastructure.

Unsurprisingly, therefore, investors sat up and took notice when Japan announced 18 months ago that it planned to boost its economy with colossal spending on infrastructure.

The first half of 2014 saw new players enter Japan’s private equity infrastructure scene. For example, US-based Fortress Investment Group launched a JPY200 billion ($1.9 billion) Japan-focused infrastructure fund to invest in roads, airports and other infrastructure assets; while Equis Group and Partners Group launched a Japan solar joint venture.

In October, a joint venture was announced between Australia’s Macquarie Capital and Maeda Corporation (a Tokyo-based building and engineering firm) to invest in solar power and, in the long run, other infrastructure assets, such as wind power, toll roads, and airport concessions.