Japan's Endeavour United closes Fund III on $370m
Japanese middle market private equity firm Endeavour United has closed its third fund with JPY 53bn (USD 370m) in commitments, a two-thirds increase in size on the previous vintage.
The vehicle – launched 12 months ago – is known as Fund IX in recognition of Endeavour United’s history as a spinout from Phoenix Capital, a turnaround investor established in 2002. Endeavour United was formed in 2013 as a subsidiary of Phoenix to pursue a different investment remit.
The first two funds under the new brand closed on JPY 22.7bn and JPY 35.1bn in 2016 and 2018, respectively. Endeavour United said in a statement that Fund III was oversubscribed and closed at the hard cap with support from a diverse set of investors “despite a challenging fundraising environment.”
For the first time, the firm used a parallel offshore structure – alongside the traditional onshore vehicle – with a view to facilitating participation from international LPs.
Endeavour United positions itself as a solutions provider for small and medium-sized enterprises, focusing on business succession, carve-out, and take-private opportunities as well as recapitalisation and revitalisation situations. Areas of interest include manufacturing, construction, wholesale and retail services, advertising and marketing, and corporate services.
The firm noted that Japan faces numerous challenges, from a lack of next-generation owners and a need for business development capital to portfolio restructuring and compliance with environment, social, and governance (ESG) protocols.
Endeavour United completed six core investments in 2022, including real estate services provider Usui Home Holdings, home repairs business Hometech, staffing agency Takako Holdings, foam products manufacturer Archem, real estate contractor Minamisouken, and Rinx Holdings, operator of a chain of laser hair removal clinics. There were also two bolt-on acquisitions by existing portfolio companies.
In addition, there were exits from printing services business Joetsu, metal fittings manufacturer Nippon Katan, and Pizza Hut Japan.
Prior to Endeavour United’s final close, more than USD 4.6bn had been committed to Japan-focused funds in 2023 to date, with significant closes from the likes of Advantage Partners and Globis Capital Partners. This represents 60% of the full-year total for 2022. Fundraising for Asia as a whole, excluding renminbi-denominated vehicles, is USD 24.3bn, less than one-quarter of the full-year total for 2022.
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