Japan’s state-backed investment firm looks to partner with global private equity firms to accelerate the growth of domestic companies, Reuters reports.
Japan Investment Corp. ($20 billion) will create funds with private equity firms, sovereign wealth funds, and institutional investors to invest in Japanese businesses, rather than invest directly.
“The biggest difference between us and foreign private equity firms such as KKR, Blackstone, and Bain Capital, is that we are a long-term investor,” Masaaki Tanaka, the organization’s chief executive officer, told Reuters.
He added that there is a current “prejudice” against foreign private equity firms in Japan, but if the businesses would team with the Japan Investment Corp., it would then be able to overcome that obstacle, benefiting all.
The organization was established last month, taking on the responsibilities of the Innovation Network Corp. of Japan, another state fund that aimed at promoting growth in domestic companies.
The Japan Investment Corp.’s chief said it would be willing to buy the stakes of private equity funds it co-invests with, if the funds decided to exit early. Tanaka also told the news agency that smaller Japanese private equity firms would be able to reach larger deals if they paired up.
In addition to the private equity foray, the state entity wants to create a venture capital fund, a fund that targets overseas firms, and an engagement fund that would own about a 5% stake in companies. The Japan Investment Corp. also wants to make proposals on improving corporate management, a recent countrywide mission to improve its reputation.
Tags: Japan, Japan Investment Corp., Masaaki Tanaka, Private Equity