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Carlyle launches Japan growth capital team

Washington DC-based Carlyle Group has launched a new growth capital team that will invest in small companies in Japan.

Carlyle Group, the US private equity firm that already has a Japanese buyout fund, is now turning its attention to smaller-scale investments in the country by launching a new growth capital investment team.

In a statement, Carlyle said the team would invest 500 million yen to 3 billion yen ($5 million to $29 million) in “expansion to pre-IPO stage” companies “with significant growth potential”. It will become part of the Carlyle Asia Venture Group, which is headed by Wayne Tsou.  

Haruyasu Asakura, who is currently a managing director of Carlyle’s $470 million Japanese Buyout Fund, will head up the new team. The statement said he would assemble a team of investment professionals in early 2005. Asakura led Carlyle’s $2 billion buyout of mobile services provider DDI Pocket earlier this year, and was also responsible for a growth capital investment in eAccess, the internet service provider that achieved an IPO on the Tokyo stock exchange in October 2003. Carlyle said Asakura would leave the buyout team but remain a board member of DDI Pocket. 

The team will target sectors including business services, information technology, communications, semiconductors, media and content. In a statement, Carlyle said it will seek co-investments with Japanese corporations as well as other investment firms, and expects to make two to three investments next year.

“Given the increasing integration of the major Asian economies of Japan, China, Korea and India, there are tremendous synergies to be derived from a seamless regional operation,” said Wayne Tsou.

Carlyle has made a strong imprint on the Japanese private equity market, where it is investing its $470 million Japanese Buyout Fund, which it closed in January 2004. Earlier this month, the firm backed the $140 million secondary buyout of Rhythm Corporation, a Japanese automotive component manufacturer, from JP Morgan Partners and the Rhythm management team.

Carlyle is also hoping to make an impression in China, where it has teamed up with Prudential Financial to buy a 25 percent stake in China Pacific, China’s third-largest life insurance firm, in a deal expected to complete soon for around $400 million.