Ex-JAIC boss to launch Japan secondaries fund

Participants in the first close - of $40-50 million - will be Japanese institutions, including some government-related entities. Foreign investors will then be targeted, with a view to a final close towards the end of 2013.

While Ant Capital, the only other pure-play direct secondaries investor in Japan, mainly operates in the mid-cap space, WM is more interested in early-stage investments.

"There are a lot of opportunities for the traditional mid-market secondaries but we are more about investing in emerging companies that are trying for 10x sales growth in 2-3 years, typically in the IT sector and related industries," Matsumoto said. "In the last couple of years we have seen a lot of angel investors appear in Japan who are good at managing companies in the early stages. We would come in and help take these companies to the next level."

He notes that there is a big gap in the market for private equity players to work with companies in between the pre-IPO and seed stages, providing capital and operational value-add.

In addition to targeting VC funds at their tail end of their lives that are looking for liquidity or support for portfolio companies, WM will focus on corporations keen to trim their risk exposure on strategic investments and financial institutions that, through regulatory requirements or management policy, are required to divest holdings.

The last fund the WM team managed while part of JAIC had a corpus of JPY8 billion. Over a period of 10 years, the team invested around $120 million and delivered a 2.7x return. Backers included Development Bank of Japan and institutional investors such as insurance companies and trust banking corporations. These groups are being approached to re-up in the new vehicle.

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• Topics
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• North Asia
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