Unitas and Merrill Private Equity Closes Tokyo Offices

It was reported that Merrill Lynch Global Private Equity has closed its Tokyo Office "mainly due to lack of deal flow in Japan’s private equity markets." Prior to this, Unitas Capital (ex-CCCP) also closed its Tokyo office, giving more priority to other Asian offices.

Japan has been a difficult market for many foreign funds. Restricted by their fund size, the foreign funds in Japan typically chased large deals. Despite the precedence of the Shinsei Bank deal, large deals are few and far between in Japan.

Foreign funds account for only 15% of approximately 500 buyout deals to date in Japan (as well as 15% of approximately 200 exits). The 500 deals are typically small in size. Four out of every five deals have less than a USD 100 million transaction value and Japanese funds have historically dominated the deal flow.