Ardian opens Japan office to capture local LP interest in alternatives

Kanji Takenaka, the firm's newly-appointed managing director and head of Japan, will lead activities on the ground. Takenaka previously served as a principal at HarbourVest Partners.

“Banking institutions and a few pension funds in Japan have been committed to alternatives for quite some time. But now is an important time given that some large institutions – whether they’re state pension funds or corporate pension funds – have decided to actively invest in the alternatives space,” Jan Philipp Schmitz (pictured), managing director and head of Asia at Ardian, told AVCJ.

“Not only do they want to invest in private equity, but also infrastructure and other asset classes. It is a real sign that corporate Japan is moving into the alternative investment space."

Japan Post Bank has quickly become one of the most significant LPs in the country, having launched its private equity program as recently as April 2015. As of September 2017, it had committed around JPY140 billion to the asset class. Last month, Japan Post Bank and Japan Post Insurance formed a joint asset management company – with initial funding of JPY120 billion ($1.1 billion) - that will make direct private equity investments alongside GPs.

The Government Pension Investment Fund (GPIF) – the world’s largest pool of retirement savings with about $1.5 trillion in assets – is moving more slowly. Having made a few one-off commitments, it issued a call for applications from alternatives managers last year and is in the process of awarding mandates. StepStone Group won a global infrastructure fund-of-funds mandate last month. The expectation is that other pension funds will follow GPIF's lead and also start making allocations to the asset class.

Ardian opened offices in Singapore and Beijing in 2005 and 2012, respectively. The firm has nearly 50 LP relationships in Asia and has deployed $8.2 billion in the region through its managed funds. Ardian received its first commitment from a Japanese LP in 2004 and now counts more than a dozen LPs from the country as clients. They represent over $2 billion of assets under management.

“Those [Japanese investors] who began investing in alternatives many years ago generally first invested in private equity and then in infrastructure. Today they typically look at private debt as well. But many institutions that start investing in alternatives today are looking at pretty much everything at once. Some large pension funds will probably start with private equity and infrastructure in parallel, and then private debt and credit,” explained Schmitz.

Ardian manages $66 billion in total assets in Europe, the US, and Asia. Its fund-of-funds portfolio – mostly secondaries but with some primary exposure – accounts for about 60% of the total. The firm also offers a range of investment products including private credit, direct PE funds, infrastructure, and real estate, as well as customized mandates under separate accounts. In Asia, it has made about 100 fund investments and 20 direct investments.

“We try to be active on all fronts of the investing side from our Tokyo office. On the secondary side, we have in the past bought assets from Japanese sellers, and we continue looking at opportunities in Japan. We also offer tailor-made mandate solutions to some clients. In addition, we are now in discussions with many Japanese institutions to invest in infrastructure, private equity and private debt funds outside Japan,” said Schmitz.

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• Topics
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• HarbourVest Partners
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