23
Jun
Japan private equity: Survival of the fittest
Local and global private equity firms are capitalizing on favorable macroeconomic conditions, activist pressure and corporate governance tailwinds in Japan. Driven by a severe shortage of successors, Japanese SMEs are increasingly turning to the M&A market. However, while prime assets remain abundant, fierce competition and the gap between high valuations and actual profitability are making it difficult for PE firms to justify acquisition prices. Simultaneously, top Japanese PE players are aggressively raising new capital to seize these domestic opportunities and create a ‘national champions’ to compete at the top end of the deal spectrum.
- What are the distinct approaches of domestic and global PE firms in penetrating the Japanese M&A market, and what can they draw from each other's playbooks?
- As high valuations and intense competition price many out of the mega-deal space, has the mid-market officially become the primary battleground for PE alpha creation in Japan?
- How can private equity firms use activist campaigns as catalysts for take-private transactions, and how do they address growing concerns about their association with activists?
- Which exit channels will be most prolific over the next 12 months?
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SpeakersTomoko Kitao Managing Director Hamilton Lane
Tsuyoshi Yamazaki Partner Integral
Kohei Nose Executive Officer, Co-Head of Buyout Group Japan Post Bank Asset Management
Yutaka Tozaki Partner J-STAR Co., Ltd.
Takuji Ishida Executive Director The Longreach Group
T.J. Kono Partner Unison Capital
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Tomoko Kitao is a Managing Director at Hamilton Lane, based in the firm’s Tokyo office, where she is primarily responsible for management support and development of the firm’s client relationships in Japan. Prior to joining Hamilton Lane in October 2012, Ms. Kitao was with the Bank of Tokyo-Mitsubishi UFJ, most recently as Chief Manager in the International Credit Division. Previously, she was Senior Manager in the Structured Finance Division, where she was responsible for managing a portfolio of global private equity fund investments. She also has extensive experience in the Credit Division, having worked out of the bank’s New York and London offices. Ms. Kitao received a B.A. from International Christian University. She is a Chartered Financial Analyst and a member of the CFA Institute and CFA Society Japan. Ms. Kitao currently holds a Sales Representative Qualification Class 1, 2, and an Internal Administrative Qualification with the Japan Securities Dealer Association.
Mr. Yamazaki has engaged in private equity investment since the early 2000s consistently.In addition to investment analysis and execution, he has a wealth of experience in participating in the management of portfolio companies for value-creation on hands-on basis and in fund-raising from institutional investors.
He joined Integral Corporation in 2009, and has been mainly responsible for investments in Yohji Yamamoto, FiBest, Aderans, Toyo Engineering, SDRS, JRC, Primo Global Holdings, Tekscend Photomask, Asahi Kasei Medical, and Golf Digest Online.
Prior to joining Integral Corporation, he worked at Industrial Revitalization Corporation of Japan (IRCJ) from 2004 and was mainly involved in corporate revitalization project of small and middle-sized manufacturing company.Before joining IRCJ, he worked at Strategic Business Transformation division of Deloitte Tohmatsu Consulting (now known as Abeam Consulting) and was involved in several business process transformation projects.
Personal history
BA Economics, the University of Tokyo, MBA, Harvard Business School
2001 Deloitte Tohmatsu Consulting(now known as Abeam Consulting)
2004 Industrial Revitalization Corporation of Japan
2009 Integral corporation
2020 Promoted to Partner at Integral Corporation
Kohei Nose joined Japan Post Bank Asset Management (JPAM, f.k.a. Japan Post Investment Corporation) in 2018 as one of the founding members of the buyout co-investment program. He serves as Co-Head of Buyout Group and a member of the investment committees.
Today, JPAM is an asset management arm of Japan Post Bank and offers investment advisory services as well as manages public and private funds. Since inception, JPAM’s buyout co-investment program has invested in more than 40 companies across the Asian region including Japan and a wide variety of industries, partnering with reputable private equity firms.
Kohei Nose built up his career in the investment banking, working at Nomura, UBS and Citi in Tokyo, before joining JPAM.
He holds a B.A. in Economics, the University of Tokyo.
Joined J-STAR in January 2015. He made 11 investments in Minoshima (temporary electrical construction), Horiuchi Machinery (Manufacturing and sales of hydraulic cylinders), Senior Life Create (Home delivery of meals to the elderly), Tokuyama Shokai Group (Demolition work), Toy Factory (Manufacturing and selling recreational vehicles), Dainichi (processing and sale of cultured fish), WEGO (casual apparel), Sanwa Service (sale of cars), ITTY (D2C of health and beauty-related products), Aisei Pharmacy (management of pharmacies), Japan Hospice Holdings (hospice services, TSE Mothers 7061), and executed 3 successful exits.
He designs tailor-made structures to meet the challenges and needs of owners and their companies. During the investment period, he supports the sustainable growth of each portfolio company by strengthening the organizational structure and implementing individual business improvement projects. He is committed to deepening mutual understanding with the management and other stakeholders of each company.
Before joining J-STAR, he worked in the Investment Bank division of Nomura Securities and the Ministry of Economy, Trade, and Industry.
He graduated in political sciences from the Faculty of Law of Keio University. Since 2020, he has been working to diffuse integrated reports as a member of the board of WICI.
Takuji Ishida is an Executive Director based in Tokyo. He has been involved in investments including Japan Systems, Blueship, nobitel (Dr.stretch), and BDL Group. Prior to joining Longreach, Takuji was a Managing Director at Polaris Capital Group, a private equity in Japan, where he played key roles in deal originations, transaction execution activities, and value creation for several portfolio companies. Prior to Polaris Capital Group, Takuji worked at Mitsubishi Corporation focusing on investments/project finance in Liquefied Natural Gas projects. Subsequently, at Boston Consulting Group, Takuji was a Project Leader in charge of developing strategies, formulating med-to long-term business plans, and launching new businesses in several sectors.
Takuji received a Bachelor of Laws from Kyoto University and an MBA from The University of Chicago Booth School of Business.
T.J. Kono joined Unison Capital in 2002. He has managed a number of investments in Japan since Unison’s first fund, then led Unison’s expansion to Korea as its founding member. Today, he serves as an Investment Committee member in both Japan and Korea. He has been involved in Unison’s investments in Drug Eleven (Japan), Mine-Mart (Japan), UCOM (Japan), Nexcon Technology (Korea), Gong cha (Korea)/Royal Tea Taiwan (Taiwan), and Minacia (Japan). In addition to investment role, he oversees Unison Group’s investor relations functions. Prior to Unison Capital, he worked at Merrill Lynch Japan.
Mr. Kono has a B.S/B.A. from Washington University in St. Louis.