Japan Industrial Partners sets $2bn hard cap for Fund VI

The fundraising process for Fund VI began in early 2022 and a first close came approximately six months later, according to a source close to the situation. The extension means a final close must come by year-end. JIP did not respond to a request for comment.

Should the hard cap be reached, the corpus will be twice that of its predecessor. Substantial increases in fund size have become a feature of the Japanese market. A wider array of investment opportunities – notably corporate carve-outs, which have become both larger and more accessible – is often the justification for scaling up.

The Carlyle Group recently launched its fifth Japan fund with a target of JPY 400bn, a 55% increase on Fund IV, while several local GPs have pushed past JPY 100bn. Polaris Capital Group and Advantage Partners closed their most recent funds on JPY 150bn and JPY 130bn, respectively.

The carve-out opportunity resonates with JIP, which has established itself as a specialist in the field. On closing Fund V on JPY 148.5bn – including a JPY 46.2bn co-investment vehicle – in 2018, the firm expressed its desire to pursue larger opportunities without looking to other partners to take the lead.

In 2017, JIP participated in a JPY 322bn tender offer for Hitachi Kokusai Electric that involved an equity contribution of around JPY 49bn. At the time, the firm was deploying its fourth fund of JPY 67.4bn, so KKR took the lead. Six years on, JIP overcame global competition to drive the Toshiba transaction, rallying support from a string of local strategic supporters.

The firm was founded in 2002 in the wake of the Asian financial crisis with a mandate to support the revitalisation of corporate Japan, primarily by carving out and restructuring assets from large players and restructuring mid-size businesses. It typically works with management teams to drive growth.

In addition to Hitachi, JIP has acquired businesses from the likes of NEC Group, Nippon Steel, Toyota Motor Corporation, Asahi Glass, Yamaha Corporation, Olympus Group, and Sony Corporation.

Some corporates have delivered multiple assets. Of eight deals completed by JIP in the past nine years, four came from NEC, most recently a JPY 3.1bn tender offer for electronics supplier Nippon Avionics. Earlier this month, JIP said it and NEC would be the local partners in a joint venture with BostonGene, a US-based provider of artificial intelligence-enabled profiling solutions.

Other significant investments include a JPY 816.8bn tender offer for Hitachi Metals, where JIP worked with Bain Capital and Japan Industrial Solutions. This was the second-largest private equity buyout completed in Japan – to be relegated to third once the Toshiba deal closes.

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• Topics
• North Asia
• Fundraising
• Buyout
• GPs
• Japan
• Japan Industrial Partners
• Fundraising