Private Equity Sees Opportunity in Getting Naked With Strangers

For Japan’s growing flood of foreign tourists, one of the top internet search terms is “onsen,” the traditional hot springs where travelers have soaked since the days of the samurai. Now some of the world’s oldest businesses are attracting big new money.

Private equity funds like SoftBank-owned Fortress Investment Group LLC and Hong Kong-based Odyssey Capital Group are spending billions to tap into the appeal of traditional inns amid a tourism boom that’s ramping up ahead of next year’s Tokyo Olympics. The big funds are moving in as centuries-old spas, many of them still family-run, struggle to find successors in an aging country where small towns and villages are losing young people.