Globis upbeat on Fund IV first close

Seven years later and Globis is again targeting JPY15 billion for Fund IV, an understandably modest goal when you consider the series of shocks, both natural and made-made, that have impacted the Japanese economy in the interim. Four months in and the fund has reached a first close at JPY8 billion, suggesting investment appetite is still strong despite a fragile macroeconomic recovery.

Perhaps the most startlingly fact is that around 80% of commitments received so far have been from domestic LPs who in the past have been notoriously wary of VC. In Fund III, or any of Globis' earlier funds, non-Asian LPs accounted for the majority of the corpus, with only a small amount coming from local investors.

Although many foreign LPs have yet to commit to Fund IV, increased local investor appetite is evidenced by commitments not only from the likes of Mitsui Sumitomo Banking Corp. but also from pension funds that haven't previously sought VC exposure. "Finally we are starting to see more Japanese investors turning to private equity," says Shinichi Takamiya, a partner with Globis. "Some the opinion leaders in the pension world are starting to commit, so we hope to continue to see a trickle-down effect."

Another positive for Globis has been the economic reforms put in place by Prime Minister Shinzo Abe, the immediate impact of which has been increased foreign investor interest and a robust IPO market. Takamiya notes that the VC firm has already made five IPO exits from Fund III.

Thee investment thesis for Fund IV follows that of its predecessors. Deals will range from early and expansion stage companies to late-stage, including management buyouts and carve-outs, with JPY300-500 million committed per company. Industries of interest include web and mobile services, corporate solutions, media, technology, healthcare and education.

"We are going to focus on those sectors and technologies where Japan has an advantage and try to take companies overseas," says Takamiya.

He adds that there is still ample opportunities for venture capital in Japan where the start-up space is vastly underserved. This is gradually being addressed as tech talents from the likes of Keio and Tokyo Universities are opting to set up on their own now that conglomerates are no longer able to offer lifetime employment.

"Despite the stereo typical image of Japan of not being entrepreneurial, we see are seeing a younger generation of entrepreneurs coming through," says Takamiya.

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• Topics
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• Globis Capital Partners
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