Brightrust PE Japan

June 12, 2015

GPIF Said Major Launch Of Alternative Investment Program In 2016

In an interview with the CEO and CIO of GPIF, Nikkei reported today:
 CIO Hiromichi Mizuno, in his first interview with a Japanese media outlet since taking office in January, indicated that the GPIF will step up investment in alternative assets.

     The fund will increase real estate, infrastructure and unlisted stocks to as much as 5% of total assets. "We are hiring and will assign four or so managers to each" category, Mizuno said.

     With its current quarters increasingly cramped, the GPIF will relocate to a bigger office in Tokyo's Minato Ward. The new alternative-asset investment team will be ready to roll after the move and get into full swing as soon as next year.

     But Mitani noted that the fund is not ready to aggressively increase investment in such assets, citing the costs involved. Assets like real estate must be securitized rather than simply purchased by the GPIF, so the complexity of the process adds commission costs.

May 29, 2015

MBK Auctions Tasaki

MBK Partners is reportedly soliciting first-round bids to divest its portfolio company, Tasaki.

Tasaki is known for its pearl and generally seen as the No.2 perl jewerler after Mikimoto.

MBK Partner invested JPY 7 billion in Tasaki in the form of preferred shares in October 2008, when Global Financial crisis was erupting. However, Tasaki's profit had fallen into red a few years before the GFC and, by late 2008,  its share price was already a small fraction of its 2006 peak. Nonetheless, the share price further plunged and it took 4 years for MBK to make Tasaki marginally profitable. It was only in the last FY (ending Oct 2014) that Tasaki was able to report JPY 1.5 billion operating profit. For the first quarter of FY 2015, Tasaki reported JPY 0.7 billion net income.

According to the Bloomberg report, "The sale may fetch more than 25 billion yen ($202 million)" and "Chow Tai Fook Jewellery Group Ltd., the world’s largest listed jeweler, is among companies weighing offers."

If all the preferred shares are converted into common shares, MBK's ownership will increase from the 49% to 79%. Apparently with virtually no net debt, if the company is sold at JPY 25 billion, Tasaki deal could bring a 2.5-3x return to MBK's first fund.

May 22, 2015

CLSA Announces 2 New Investments

CLSA Capital Partners has announced 2 new investments in about a week for its Sunrise II Fund.

On may 15th, CLSA completed a share acquisition of Asamiya Co., Ltd.,  a low-cost food and beverage manufacturer based in Osaka. Asamiya was founded in 1951 and its product range includes food and beverages such as mineral and sparkling water, canned coffee, ice, soy sauce, and instant ramen noodles.  Asamiya’s consolidated sales in fiscal year ending March 2014 was approximately JPY14 billion(USD 117 million) and has approximately 600 employees. The founder family will retain some shares and continue to run the company.

Today, CLSA announced that Sunrise II has acquired a stake in Worldtool Co., Ltd.,  a wholesaler and retailer of automotive tools. Worldtool was founded in 1995 by the current CEO, who will remain at the helm of the company. Worldtool operates nearly 140 retail stores nationwide under the store name “Astro Products”. Worldtool has approximately 730 employees and its sales in fiscal year ending July 2014 were approximately JPY6 billion (USD 50 million).

Sunrise II announced its final closing in October 2014 with approx. USD 210 million commitments. It aims to build a more diversified portfolio than its predecessor Sunrise I and now has 4 portfolio companies.

April 03, 2015

GPIF Issues RFP For The Selection Of Trust Banks for Private Asset Investments

Japan's Government Pension Investment Fund today announced a RFP for the selection of (a) trust bank(s) that will act as the custodian and administrator of GPIF's intended investments in private assets, such as private equity, infrastructure and real estates. (in Japanese only)

The candidates should have the trust bank license and regulated in Japan. They will include Japanese trust banks as well as trust bank subsidiaries of foreign financial institutions.

The deadline for proposal submission is April 24th.

March 25, 2015

Bain Takes Private Japan Wind Development Together With Its President

It was reported that Bain Capital plans to acquire Japan Wind Development, Japan's third-largest wind power company listed on Tokyo Stock Exchange, through a tender offer.  Bain will establish a company jointly with the current president of the target company each owning equal voting rights and the company will offer 580 yen ($4.76) for each of Japan Wind Development's shares, a 30% premium over the average share price of the last 3 months. If all outstanding shares are acquired , it will cost JPY 9.7 billion (USD 80 million).

Japan Wind Development has approx. JPY 40 billion liability. According to the filing documents, the company expects refinancing of its debt and hopes Bain's participation will help enhance its credit.

Last year, the Financial Services Agency ordered Japan Wind to pay fines for accounting irregularities. The company has since filed a suit, seeking to repeal the decision.

An outsider would wonder if Bain should have insisted on the majority ownership of the company in this transaction.

November 21, 2014

Blackstone to Purchase GE Capital’s Japan Residential Business

The below is from Blackstone's press release.

Tokyo, Japan, November 21, 2014 – Blackstone (NYSE:BX) today announced that funds affiliated with Blackstone Real Estate Partners Asia will make an investment in connection with an agreement to acquire GE Japan Corporation’s 100% owned residential real estate business for over ¥190 billion. The business owns and operates more than 200 residential properties, consisting of over 10,000 units primarily in Tokyo, Osaka, Nagoya and Fukuoka.

“We continue to believe strongly in the residential sector’s fundamentals, especially in Japan’s major cities,” said Alan Miyasaki, Senior Managing Director at Blackstone. “We are excited by the opportunity to invest in such a high-quality and well managed business.”

Francois Trausch, Chief Executive Officer – Asia-Pacific at GE Capital Real Estate said, “This transaction supports our global strategy to reduce our equity book as we continue to build our global debt operations. We are pleased that our Japan residential business will transfer to another premier owner/operator with a strong emphasis on tenant satisfaction.”

GPIF Appoints A Coller Capital Partner To Its Newly Introduced CIO Position

According to Government Pension Investment Fund's press release on 20 Nov 2014;

"Mr. Takahiro Mitani, President of Government Pension Investment Fund (GPIF), will appoint Mr. Hiromichi Mizuno as Executive Managing Director (Chief Investment Officer) on January 5th, 2015.
Upon this new appointment, Mr. Mizuno will resign a member of Investment Advisory Committee at GPIF, as well as a partner of Coller Capital."

As GPIF can appoint only 1 Executive Managing Director besides its President, this appointment puts Mr. Mizuno the second most senior person in the pension fund. This is the first time that GPIF introduces CIO position, which will oversee all asset classes.

November 13, 2014

DRC Acquires Stakes in Chan Luu

DRC Capital, through its DRC II Fund and DRC III Fund, has invested in Chan Luu, a Los Angeles based jewelry and accessories company. According to DRC, Ms. Chan Luu, the designer and the founder, will remain active in the company and will be based in Los Angeles, California.

Chan Luu products are made in Vietnam, where the designer is from, and the US and Japan account for the vast majority of its sales. DRC has formed Chan Luu Japan to optimize and beef up its business in Japan and aggressively expand into the Asian market.

November 07, 2014

GPIF Sets Maximum Allocation To Alternatives At 5%

In its press release on October 31, GPIF announced "Adoption of New Policy Asset Mix".  As shown below, GPIF has substantially increased the allocations to domestic and international stocks.

The announcement coincided with BOJ's further easing and with the Nikkei index surging by 5%, media reports seemed to focus only on the stock allocation increase.

However,  "Adoption of New Policy Asset Mix" did include an important announcement that GPIF for the first time set the allocation for alternative assets with the upper limit of 5%.  It said:

"In order to achieve efficient investments by diversification, policy on alternative investment is stated in the new policy asset mix for the first time."

"Alternative investment will be made within maximum 5% of total portfolio, in accordance with development of dedicated team. Infrastructure, private equities, real estates or other assets determined upon deliberation at the Investment Advisory Committee, are classified as domestic bonds, domestic stocks, international bonds or international stocks, depending on their risk and return profiles."

Please refer to p. 2 and p.13 of  the press release:

October 01, 2014

Marunouchi Sells Sijo Ishii to lawson for JPY 55 Billion

Marunouchi Capital has announced that it will sell all Seijo Ishii shares to Lawson. The deal will be executed on October 31st. Media reported the sale price was about JPY 55 billion including debts.

According to Nikkei, "Seijo Ishii owns about 110 stores in and around the three major metropolitan areas of Tokyo, Nagoya and Osaka. Touting a unique merchandise selection of imported products, high-end prepared meals and other items, the company boasts the leading earnings growth in recent years among supermarket operators. It logged both revenue and profit growth for five consecutive years through 2013. This year, it is on track to ring up a 10% sales gain to 60 billion yen, with operating profit jumping 36% to around 4.5 billion yen."

Lawson is the second largest convenience store operator in Japan after Seven Eleven. The sale process of Seijo Ishii began last May and other suitors included retail giants Aeon and Isetan Mitsukoshi Holdings.

Marunouchi Capital bought Seijo Ishii in February 2011 from Rex Holdings, which was then owned by an Advantage Partners' fund, for a reported sum of JPY 40 billion.

August 13, 2014

GPIF Considers 5% Allocation to Private Assets

Jiji Press yesterday reported "The Government Pension Investment Fund plans to create a new portfolio category for investments in assets such as infrastructure, real estate and private equity, sources said." and"GPIF is in the final stages of deciding the new quota’s size but plans it to be the portfolio’s smallest, possibly representing around 5 percent of total assets, the sources said."

It also reported "The short-term assets category currently accounts for 5 percent of total assets and is a category that GPIF is considering excluding from its new portfolio." 

As it appears that the new alliterative allocation simply replaces the cash allocation, it will not affect allocations to other assets such as bonds and equities.

July 03, 2014

Polaris Listed Voyage On Tokyo Stock Exchange / Sold Down Ekitan Since Feb 2014

Polaris Capital has listed Voyage Group Inc., which operates online price comparison and other membership sites and provides advertising services, on Tokyo Stock Exchange’s Mothers market on July 2nd.

In June 2012, Polaris Private Equity Fund II acquired a majority stake, reportedly 62%, in Voyage supporting the management buyout from the then parent Cyber Agent.

According to Polaris press release:
"VOYAGE GROUP, through implementation of its mid-term business plan (the first 100 day plan) formulated in collaboration with Polaris, strengthened the earning power of the membership and media business, and secured the position of industry leader in the rapidly growing market of advertising technology. Consequently, the sales for the current FY ending Sep 2014 is expected to reach JPY 14 billion (company forecast), more than 70% increase in 2 years since the MBO. The operating profit for FY ending Sep 2014 is expected to be JPY 1.5 billion (company forecast) showing an exponential increase from JPY 2 million in FY ending Sep 2012."

Prior to the listing, Polaris sold 25.32% of total outstanding shares of Voyage at JPY 2, 208 for the total sum of approx. JPY 6.2 billion to underwriters. As of July 2nd, Polaris continue to own 25.65% of Voyage.

The stock price jumped at the listing and the first trading price (JPY 3,360) exceeded the listing price (JPY 2,400) by 40%.

Polaris has also sold 19.3% of Ekitan through 3 transactions since Feb 2014 for about JPY 682 million. Current holding is only 4.23%.

July 02, 2014

Carlyle to Acquire SBI Mortgage For About JPY 43 Billion

Just 10 days after the announcement of the acquisition of Sansho Pharmaceutical, Carlyle has announced the commencement of tender offer for share certificates etc., of SBI Mortgage Co. Ltd. Carlyle aims to acquire 100% of the Japan-based mortgage bank, which is engaged in the origination, servicing and securitization of mortgage loans. The total equity purchase value will be approx. JPY 42.7 billion. Alongside with Caryle, SBI Mortgage's current parent SBI Holding will invest JPY 2 billion and Tokio Marine Mezzanine Partners I, which announced its first closing with JPY 25 billion on May 29, will provide JPY 5 billion in the form of preferred shares to the acquiring platform company.  

As SBI Mortgage has issued Korean Depository Receipts (KDR), which are listed on KOSPI, the tender offer is conducted simultaneously in Japan and in Korea from July 1st to August 12th. 

The tender offer price was set at KRW 18,000 / KDR, which represents 42.6% premium over the last 6 month average KDR price or 34.1% over the last 3 month average. Japanese investors, including SBI Holding (51.26%), several SBI-related or managed investment funds and senior management of SBI Mortgage, will convert the KDRs into common shares and subscribe to the tender offer. They aggregately own approx. 71% of the company or approx. JPY 30.3 billion worth of KDRs. Carlyle aims to acquire the reminder of the KDRs through the tender offer in Korea. 

For the FY ending March 2015, SBI Mortgage forecasts JPY 14 billion in operating profit and JPY 2.5 billion in after-tax profit. 

The mortgage company has been rapidly increasing loan assets, increasing from JPY 900 billion in March 2011 to JPY 2 trillion in May 2013, most of which are sold to public and private banks through securitization. With the changing economic environments, the company is now seeing a need for revising its business model that is dependent on long-term fixed rate mortgages.

June 20, 2014

Carlyle Acquires Sunsho Pharmaceutical

Carlyle Japan has announced that it has agreed to acquire 100% stake in Sunsho Pharmaceutical, a company specializing in contract manufacturing of capsules for health & nutrition and pharmaceutical use.

Sunsho Pharmaceutical is 2nd largest health & nutrition contract manufacturers in Japan with USD 165 mm revenue in 2013. Sunsho offers contract manufacturing and packaging services of soft capsules, seamless capsules and other dosage forms for health & nutrition and pharmaceutical use.

The transaction is expected to close in August 2014. Following the transaction, the founder CEO of Sunsho will retire.

Sunsho is Carlyle Japan's 2nd investment in capsule manufactures. In October 2005, Carlyle acquired 100% stake in Qualicaps Group from Shionogi & Co., and exited the investment through a sale to Mitsubishi Chemical in March 2013.

May 29, 2014

Carlyle Investes In A Japanese Snack Maker, Oyatsu

Carlyle Japan has announced that it has acquired a stake in Oyatsu Co., the 65-year-old Japanese maker of crispy snacks, from Carlyle Japan Partners III fund.

According to Bloomberg "Carlyle may pay at least 25 billion yen ($246 million) for Oyatsu,  whereas Nikkei reported "Carlyle is expected to pay around 20 billion yen ($194 million) to acquire over 51% of voting rights in Oyatsu Company".

Oyatsu is best known for its Baby Star snack, which is made from the byproducts of manufacturing noodles. The company posted sales of JPY 18.2 billion in the year through July 31. Oyatsu has 370 employees and exports the snack to Hong Kong, Taiwan, Thailand and Singapore and Mexico. According its press release, Oyastu aims to develop its overseas business capitalizing on Carlyle's global network.  

Bloomberg also reported that Carlyle and Unison "plan to sell semiconductor-parts maker Covalent Materials Corp., people with knowledge of the matter said earlier this month. The two firms are preparing an auction for the proposed sale of Tokyo-based Covalent and are seeking to sell it for about 50 billion yen."

April 24, 2014

Baring Sells Precious Metal and Jewelry Recycler Net Japan To Orix

Baring has sold its holdings in Net Japan Co., Ltd. to Orix Corporation. Nets Japan "purchases and sells via intermediaries gold, silver, platinum, palladium, diamonds, and fine jewelry owned by individuals and sells these to refining companies, trading companies and others".  Baring acquired its stake in Net Japan in April 2012.

Hong Kong, Tokyo April 22, 2014 – Baring Private Equity Asia (“Baring Asia”) announced today that Net Japan Holdings Limited, a Hong Kong company owned by a fund advised by Baring Asia, has sold its holding in Net Japan Co., Ltd. and shares in its group companies (“Net Japan”) to Orix Corporation, the Japanese financial services group.

Established in 1995 by Mr. Toshiyuki Yoshizawa, Net Japan is a major precious metal, jewelry and diamond recycler. The company purchases and sells via intermediaries gold, silver, platinum, palladium, diamonds, and fine jewelry owned by individuals and sells these to refining companies, trading companies and others. Net Japan is headquartered in Ueno, Tokyo and trades nationwide through its network of 11 branches in Japan including Tokyo, Sapporo, Sendai, Kofu, Nagoya, Kanazawa, Osaka, Hiroshima, Fukuoka, Yokohama, and Matsuyama. Additionally, through auctions that it manages in Hong Kong, Net Japan has established overseas sales routes into China, India and other markets. It is the leading company in Japan in its field with a dominant market share.

Tadashi Maruoka, Managing Director of Baring Asia in Tokyo, said, “Net Japan is a perfect example of Baring Asia’s ability to work with entrepreneurs and management teams to assist them in growing the business, particularly outside of the domestic market. Net Japan was already an excellent business but we were able to add the financial and operational skills and other capabilities to make the business an attractive acquisition target for a suitable buyer. Net Japan will now become part of the Orix Group, a leading Japanese financial group”

Net Japan Holdings Limited first acquired its stake in Net Japan Inc. in April 2012, and embarked upon a three-pronged strategy to substantially grow the business, significantly increase profits and provide exit options for its founder. The strategy involved:

(i) preparing the business for growth: Implemented a management control infrastructure to institutionalize the business, including new compliance, financial reporting, and KPI systems

(ii) achieving growth through acquisition: Net Japan Inc. acquired its number two rival, Olympic Gold, creating an enlarged group with 60% market share, and reinforcing the management team;

(iii) driving international expansion: Net Japan Inc. acquires and aggregates jewelry, diamonds and precious metals in Japan but Net Japan Holdings Limited and its affiliates have now also built distribution businesses across Hong Kong, Bangkok, and Singapore.

April 23, 2014

J-Star Acquires 70% Of Plastic Parts Maker Kugami

J-Star announced a 70% acquisition of Kugami Co., Ltd. , a maker of plastic parts for car interiors and mobile phones. Kugami has manufacturing subsidiaries in China (Suzhou, Dalian and Tianjin) and will seek to enter Southeast Asian and Latin American markets.

April 21, 2014

J-STAR Co., Ltd. Gregory Hara President & Representative Director

Announcement of Share Acquisition of Kugami Co., Ltd.

This is to announce that our wholly managed and operated investment fund, J-STAR No. 2 Investment Limited Partnership, has established Kugami Seiki Kogyo Holdings ("KGH"). Furthermore, KGH acquired approximately 70% of the outstanding shares of Kugami Co., Ltd (headquarter: Yokohama, Kanagawa, company representative: Mr. Yasutaro Shimizu,, "KGM") in March 2014.

KGM was founded in 1965 by the current president, Mr. Yasutaro Shimizu, as a plastic injection molder. Since its foundation, the company has engaged in plastic parts manufacturing for automobiles and electronic products. In 1993, the company opened its first trading center in Hong Kong and a facility in China (Zhuhai), making a full-scale entry into the car interior market including escutcheon panel manufacturing. Since then the company has continually scaled up its China operations, establishing branches in Suzhou in 2001, Dalian in 2003, and Tianjin in 2007. 
In Japan, the company mass-produces plastic parts in Nigata Factory and provides technical support to the Chinese facilities. Furthermore, the company acquired a factory in Yokohama from Kouritsukasei Co., Ltd, who produces plastic parts for mobile phones.

Going forward, while KGM is committed to continue strengthening its production capabilities in China, the company also plans to extend its production capabilities to South East Asia as well as Latin America. The company will reinforce the formation of the management team by adding new talents and consolidated group structure, while actively seeking for M&A & capital alliance opportunities overseas. By investing into KGM through KGH, J-STAR will support the growth strategy and the company structure to achieve the growth.

Mr. Shimizu, the founding owner, will remain as a president and continue to play a significant role in the management team. J-STAR is fully committed to support Mr.
Shimizu’s business growth strategy to become a leading player in the automobile parts manufacturing area.

In approaching this investment, we enlisted Fair Consulting Group for financial and tax-related due diligence, KMC Co., Ltd. for production technology valuation, and Baker & McKenzie (Gaikokuho Joint Enterprise) for legal due diligence. We financed a part of the acquisition capital from Tokyo Star Bank, Ltd. and Development Bank of Japan Inc.
We received financial advice from Crosspoint Advisors, Inc upon the acquisition.

March 03, 2014

GPIF Starts Infrastructure Investment Through A Co-investment Agreement with OMERS and DBJ

Japan's Government Pension Investment Fund (GPIF) announced on February 28 that it "entered into a co‐investment agreement with Development Bank of Japan (DBJ) and Canada's Ontario Municipal Employees Retirement System (OMERS) in order to jointly invest in infrastructure assets".

In the announcement, GPIF said "Such investments will be made throughout approximately 5‐year investment period the aggregate investment outstanding may reach up to 2.7 billion US dollar (280 billion Japanese yen) which accounts for 0.2% of the asset under management (129 trillion Japanese yen as of the end of December, 2013)".

GPIF also said "Infrastructures are classified as “international fixed incomes” in the policy asset mix and managed as a part of GPIF’s in‐house investment."

GPIF's official announcement can be found at:

It appears the investment from DBJ will be USD 100 million over the same period according to the DBJ press release.


According to a Nikkei report,  "The GPIF will earmark only 0.2% of its 130 trillion yen ($1.26 trillion) in assets under management for infrastructure investment, but suggested that the figure may increase. The fund will consider other partnerships as well as other investment areas, such as private equity and real estate, according to a senior official."

February 07, 2014

Japan Buyout Annual Review 2013

We have produced a report that reviews Japan's buyout market in 2013. 

The report covers:

Section I.   Buyout Market Overview
Section II.   New Deals in 2013
Section III.   Exits in 2013

If you are interested, please send us an email as below:


SUBJECT : Request for Japan BO Annual Review 2013 

With the below information; 

           Your name : Mr/Ms/Dr

           Your company name: 
          Country / City:

            Your company URL: 

Thank you. 

Joji Takeuchi
Brightrust PE Japan Co., Ltd.

日本バイアウト市場 2013年レポート

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