Tokyo: Marunouchi Capital Company, the Japanese private equity fund that helped more than double the profit at Transformer toymaker Tomy Company, is planning to start a second fund that may be open to overseas investors.
Marunouchi, which started its first fund in 2008 with 100 billion yen (Dh4.1 billion) from parents Mitsubishi Corporation and Mitsubishi UFJ Financial Group Incorporated, is seeking investments in mid-sized companies, said President Osamu Yasaka, a former Nikko Citigroup Incorporated investment banker.
Private equity investments in Japan fell from a peak of $15 billion (Dh55 billion) in 2007 to $4.8 billion last year, according to the Asian Venture Capital Journal. Asset prices remain cheap, giving funds an opportunity for profitable investments, said Ed Rogers, chief executive officer of Tokyo-based hedge-fund adviser Rogers Investment Advisors.
"When everyone is running away from something, maybe you should be running towards it," said Rogers, who started a private equity fund last year.
Marunouchi may start preparing for the new fund as early as next year, Yasaka, 56, said in an interview at his Tokyo office. He wouldn't give a size for the fund.
Marunouchi will probably make two investments this year, he said.
Prospect Pool
Marunouchi invests in companies through referrals from Mitsubishi UFJ, Japan's largest bank by assets, and Mitsubishi Corporation, Japan's biggest trading company by market value.
The first fund is seeking stakes of about 20 billion yen in five or six companies during its 10-year life, Yasaka said. The new fund may focus on helping Japanese companies make overseas acquisitions.
The first fund is focusing on mid-sized companies with potential to engage in mergers, those looking to spin off non-essential businesses and companies with aging leaders that lack a succession plan, Yasaka said.
The referrals provide a pool of prospects that give Marunouchi an advantage over overseas rivals, he said.
"Our advantage lies in our relationship with Mitsubishi Corporation and Mitsubishi UFJ as other funds might provide studies on management or how to break into new markets, but we've got the actual experience," Yasaka said.
Kohlberg Kravis Roberts & Company, which established an office in Japan in 2006, has yet to make an investment. Carlyle Group saw its investment in Willcom Incorporated wiped out as the wireless carrier filed for bankruptcy last week with liabilities of 206 billion yen.
Yasaka previously worked in investment banking at Nikko Citigroup Limited and Nikko Securities Company before becoming president of Nikko Investor Relations Company.
