Foreigners Net-Buy Japanese Stocks For Record 29th Week

Overseas investors were net buyers of Japanese stocks in the third week of May for a record 29th straight week, according to Nikkei. The Tokyo Stock Exchange disclosed in its weekly report "Investment trend by investor category" that foreign investors have purchased a net 30.5 billion yen worth of Japanese stocks between May 16 and 20, down from 79.6 billion yen the previous week.

AI Capital to Raise First Asia Secondary Fund

Alternative Investment Capital Co. announced that it will raise USD 150 million for its first secondary fund that would focus "exclusively on investment opportunities in the fast-growing Asian region, including China, India, Southeast Asia and Australia." According to the release, the Development Bank of Japan "has made a significant commitment to the Fund as its largest investor." Other investors include Mitsubishi Corporation and Sumitomo Mitsui Banking Corporation. Alternative Investment Capita's majority stake is owned by Mitsubishi Corporation.

LoneStar-Led Syndicate To Acquire All Tokyo Star Shares

US investment fund Lone Star and other creditors that provided funds to Japanese private equity firm Advantage Partners to buy Tokyo Star Bank have reached a broad agreement to gain full control of the embattled bank, according to Nikkei. With Advantage Partners unable to meet its repayment schedule, the Lone Star-led syndicate which also includes Shinsei Bank and France's Credit Agricole SA will exercise rights to repossess all the shares in Tokyo Star from its current owner. Advantage Partners acquired Tokyo Star in 2008 for about 250 billion yen, borrowing 170 billion yen from 20 creditors. But Tokyo Star Bank has been struggling with losses caused by putting aside more reserves for bad loans.

PE-backed Real Estate AM To Implement Roll-Up Strategy

MK Capital Management Corp., a listed real-estate asset management company, announced it has acquired a majority stake (90%) in Atlas Partners Japan Ltd., a real-estate asset management company. Atlas is proud of managing foreign money as well as high captial ratios. As MK Capital increases its AUM to about 300 billion yen through this acquisition, MK will be able to pursue economies of scale and synergies through the unification of complementary functions, business areas, and skill of both companies. Unison Capital, a major Japanese buyout firm, invested in MK Capital in February 2010 and became the largest equity holder (61.3%).

Jan-March Real GDP Annualized -3.7%

The Cabinet Office announced that gross domestic production for the January-March quarter fell 0.9% on the quarter, or an annualized 3.7%. The result was below the average market forecast of a 2.3% contraction. Personal consumption and capital spending are the main detractors. The GDP deflator also fell 1.9% from a year earlier after declining 1.6% in the October-December period.

PE-backed CSO Operator To Acquire Medical Inf. Provider

Apo Plus Station KK(APS), a PE-backed CSO operator, announced that APS acquired a majority shareholding in Synergy International Inc., a Tokyo-based information service provider specializing in the health care and medical science fields. APS, with this acquisition, will create a one-stop service to meet the wide-ranging needs of the pharmaceutical industry. J-STAR Co., Ltd., a Tokyo-based midsized buyout firm, invested in APS in September 2010.

March Machinery Orders Up 2.9%

The Cabinet office announced that private sector machinery orders, excluding volatile ones for ships and those from electric power companies, have increased a seasonally adjusted 2.9% in March. This is a rise of 3.5% in January-March period. The total value of the machinery orders received by the 280 manufacturers operating in Japan has decreased by 15.8% in March from the previous month on a seasonally adjusted basis. In the January-March period it rose by 11.5% compared with the previous quarter. In the April-June period the total amount of machinery orders was forecasted to decrease by 0.3% and private-sector orders, excluding volatile ones, were forecasted to increase by 10% from the previous quarter respectively. This forecast was basically made by summing up the figures from 280 machinery manufacturers.

Failed-Takefuji Signed Sponsorship Agreement With S Korea's A&P Financial

Takefuji Corp., a failed consumer loan company, announced that it has signed a sponsorship agreement with A&P Financial Co., Ltd., a Seoul-based consumer finance company. Since Takefuji filed a petition for the commencement of reorganization proceedings with the Tokyo District Court on September 28, 2010, Takefuji has been searching for a sponsor to achieve early reorganization of our business.

Mizuho Capital Partners To Exit Remaining Shares In SDS Bio. To Idemitsu

Idemitsu Kosan Co. Ltd., Japan's second largest oil distributor, announced it made a tender offer for SDS Biotech K.K. , a PE-backed agrichemical company. Mizuho Capital Partners, a Tokyo-based midsized buyout firm, is a 53.39% equity holder in SDS Bio. and approved the offer. The TOB price is 960 yen, a 92.38% premium over its 3-month average. SDS Bio. went public in 2008. Idemitsu plans to beef up its agrichemical business through this acquisition.

Group Annuities Investment Turn Negative In FY10

The average return for group annuities in special accounts which Japan's six largest insurers invest in on behalf of corporate pension funds was minus 2.64% in fiscal 2010, compared with 18.59% a year earlier, according to Nikkei. The sharp deterioration in investment return is mainly attributed to a drop in domestic stock prices. In addition, the yen's sharp rise to the 76 level against the dollar hurt investments in foreign bonds.

J-STAR To Acquire Machinery-Parts Maker

J-STAR Co. Ltd., a Tokyo-based independent buyout firm, announced that it acquired a majority share holding in Taiheiyo Seiki K.K., a leading manufacturer of construction machinery parts, through Pacific Precision Holding K.K., an investment firm set up by J-STAR. Taiheiyo is proud of its 14 billion yen in consolidated sales from Japan and China as of March 2011. With J-STAR, Taiheiyo plans to expand into other emerging markets such as India and to develop business for other related parts.

PE-backed Jeans Maker To File For Chapter 11

BOBSON & Co.Ltd., a Tokyo-based jeans maker, filed for Chapter 11 with a debt of 734 million yen as of Feb 2011. BOBSON was invested in by Milestone Turnaround Company, a turnaround-focused buyout firm in 2009. BOBSON, once deeply-troubled, was divided into two companies, one was supported by Milestone and the another was newly named "Peachfort Co. ltd." which has dealt with imported-brand clothing. The PE-backed new BOBSON seemed to have recovered at one point, but was said to suffer from diminished sales this year partly because of the March 11th earthquake but mainly because of fierce competition in the price-sensitive jeans market.

BOJ Cuts Forecast For FY 2011 Due to Quake

The BANK OF JAPAN announced in its " Outlook for Economic Activity and Price" report (April 2011, The Bank's View) that its nine-member board now projects 0.6% growth in real gross domestic product for this year, compared with a 1.6% expansion forecast. For the fiscal year on April 1, 2012, it predicts a 2.9% expansion compared with 2.0% growth expected in January. The BOJ also mentioned in the same report that Japan's economy is likely to recover at a faster pace throughout the second half, partly due to a rebound from the first half, on the back of clear increases in exports and production.