Japan's Integral completes $1.2b fundraise
Integral Corporation has become the second independent Japanese private equity manager since the global financial crisis to surpass $1 billion in fund size, closing its fourth mid-market buyout vehicle at the hard cap of JPY123.8 billion ($1.18 billion).
The target was JPY100 billion and as much as 50% of the capital was expected to come from overseas, a source close to the situation previously told AVCJ. Commitments came from banks, insurance companies, pension funds, university endowments, and government-affiliated financial institutions in Asia, Europe, and North America, Integral said in a statement.
The private equity firm’s previous fund was two-thirds the size of the latest iteration, closing at JPY73 billion in April 2017. Overseas investors accounted for 25% of the corpus. Integral raised JPY44.2 billion for Fund II in 2014, with a 10% contribution from international LPs.
In 2018, Japan Industrial Partners crossed the $1 billion threshold, closing its latest fund at JPY148.5 billion. Polaris Capital Group is expected to better this total with its fifth vehicle. CEO Yuji Kimura told Mergermarket last month that the hard cap of JPY150 billion had been reached and a final close would come in December. The fund is more than twice the size of its predecessor.
Prior to Integral’s final close, Japan buyout managers had raised $3.7 billion in 2020, much of that coming from The Carlyle Group’s fourth country-focused vehicle. It closed in March at JPY258 billion. Advantage Partners and CLSA Capital Partners are among the other GPs to raise funds this year. Five more managers – including Integral, Polaris, Bain Capital, T Capital Partners, and J-GIA – were in the market seeking a combined $3 billion. The previous single-year record was $4 billion in 2018.
Founded in 2007, Integral differs from most other Japanese GPs in that it puts balance sheet capital – referred to as “deal-inducing investment” – into transactions alongside fund capital. It also has a dedicated corporate value enhancement team, known as “i-engine.”
The new fund will follow a similar strategy to its predecessor, pursuing control opportunities that involve succession, turnaround and growth capital situations as well as supporting management buyouts and corporate carve-outs. It will also reach beyond of the midcap space by targeting larger Japanese companies with the support of LP co-investors.
In the past 12 months, Integral has acquired software development and IT consulting business Mamezou Holdings – through a tender offer at a valuation of JPY34.4 billion – conveyor belt part manufacturer JRC, and T-Garden, a specialist in cosmetic contact lenses. Meanwhile, Direct Marketing MiX raised JPY24.4 billion through a domestic IPO in October. Integral realized proceeds of JPY19.6 billion and retains a 48.9% stake.
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