J-Star raises $291m for third Japan fund

It is the third final close by a Japanese mid-market private equity firm in the space of a month: Tokio Marine Capital raised JPY51.7 billion for its firth fund and then Integral Group closed its third vehicle at JPY73 billion. All of Tokio Marine’s capital came from Japanese investors while domestic LPs are responsible for three quarters of Integral’s corpus.

J-Star has also benefited from this growing interest in private equity – the new fund is larger than its predecessor, which closed in 2013 at JPY20.4 billion – but approximately 60% of commitments came from international LPs, according to a source familiar with the fundraise. The GP said in a statement that it is supported by investors including global funds-of-funds, asset managers, public and corporate pension plans, financial institutions, and family offices. 

J-Star targets control and co-control investments in companies with valuations of JPY3-10 billion, typically writing equity checks of JPY1-3 billion. It claims to have completed more than 33 transactions since its inception in 2006 across sectors including consumer, services, healthcare, media and manufacturing.

Bolt-on acquisitions are a feature of the GP’s strategy with the objective of bringing about industry consolidation. This was the case in the recent acquisition of veterinarian services company Fuji Field by J-star-owned JVCC and the purchase of aged care provider Live Cross last October, which was structured as a bolt-on by Kairos Tokyo.

In addition to J-Star, Integral and Tokio Marine, CITIC Capital closed its third Japan fund at $268 million in February. Various other Japan-focused GPs are still in the market, including Advantage Partners, CLSA Capital Partners, NSSK, Polaris Capital, Ant Capital Partners, and The Longreach Group.

Evercore was placement agent for J-Star’s third fund. Simpson Thacher and Baker & McKenzie served as fund formation counsel in the US and Japan, respectively.

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• Topics
• North Asia
• Fundraising
• GPs
• Buyout
• Japan
• J-Star