A former Blackstone executive plans to launch a digital fundraising platform connecting alternative asset managers with Japanese investors, Private Equity International has learned.
The new business, LUCA, will be led by chief executive Keiko Sydenham, a former Tokyo-based managing director in Blackstone Japan’s investor relations unit, she told Private Equity International. She left Blackstone in March, having joined the firm in 2018 from JPMorgan Asset Management.
Sydenham is joined at LUCA by directors Motoya Kitamura, a former managing director at fund of funds firm HQ Capital, and Akio Tanaka, co-founder of venture capital firm Headline Asia. Headline will partly fund the business from its balance sheet as an extension of its investor relations unit, Tanaka said.
LUCA will enable local and international GPs to market and raise capital for their fund products online, Sydenham said. Most of its initial users are expected to be institutional investors, though the platform will later seek partnerships with wealth managers and HNWI advisers.
The platform is expected to launch before year-end.
The company will also be partly funded by Northvillage Investment, a private equity investor and consultancy launched by Kitamura in 2017. Kitamura joined HQ in 2019 from direct secondaries firm AB Value Partners and was formerly a co-founder of Roc Partners in Japan. He departed HQ in 2020, according to his LinkedIn.
Japan represents a vast and comparative untapped source of LP capital for private equity managers. Government Pension Investment Fund, the world’s largest pension fund, is gearing up in the space and has so far earmarked more than $6 billion for the asset class. Japan Post Bank has invested about $20 billion via private equity funds and plans to more than double its $38.2 billion alternatives portfolio by 2026.
However, accessing this capital is easier said than done. Beyond strict licensing requirements, other more nuanced considerations pose challenges, ranging from expectations for more frequent contact and communication, to a bias for name-brand funds perceived to be less risky.
“We want to solve Japan market access for international players, and to help them cut through the red tape,” Tanaka said.
Existing private markets fundraising platforms are also ramping up in Asia. Berlin-headquartered Moonfare opened a Hong Kong office in December and has plans for more, PEI reported at the time. ICapital Network, one of the largest such platforms, launched a Hong Kong office this year and has similar plans for Singapore.
Industry participants more broadly are flocking to the region in the hopes of seducing its burgeoning pool of wealthy individuals. Asia is expected to supplant Europe as the world’s second largest ultra-high-net-worth individual hub by 2024, according to Knight Frank’s Wealth Report 2020. The average Asian UHNWI portfolio had a 7 percent allocation to private equity last year, versus 11 percent in North America and 8 percent in Europe.
“Money can be raised for private equity among the high-net-worths in Japan,” Kitamura said. “They have very strong appetite for private equity, partly because they’re excited to invest directly.”