Corporate Japan more open to PE partnerships – AVCJ Forum

Olympus works with Japanese strategic investors going overseas as well as multinationals looking to enter Japan and is currently negotiating with one local corporate regarding the acquisition of assets in Asia. It wasn't always this way, though.

Shen argues that the changes seen in the last 10 years have been driven in part by a greater sense of urgency among the big corporations and in part by a shift in Olympus' strategy.

"In the beginning - from early 2000 up to 2005 - we would approach Japanese strategic investors and talk about our capabilities and network outside Japan and how we could identify acquisition targets," he told the AVCJ Japan Forum on Thursday. "It didn't work. Most of the board members, while interested in the concept, found it difficult to take concrete action. We have since shifted our resource allocation from inside out to outside in."

Despite this evolution in the market, certain challenges remain the same. For the Japanese corporations, the primary concern when making outbound investments is integrating non-Japanese management into their organizations, Shen said. For the private equity firms, there are relationship management issues to consider.

"What happens in five years time when we are trying to pursue a monetization of our investment?" Shen asked. "And then what happens during the investment period? Who drives the business plan and has approval over the budget? If the company needs to make additional capex, how do you reach a consensus?"

The AVCJ Japan Forum took place on September 13-14 in Tokyo. For more information, go to www.avcjjapan.com.

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• Topics
• North Asia
• Deals
• Investments
• Outbound investment
• Japan
• Olympus Capital Holdings Asia