J-STAR has hired a new principal to focus on operational improvements within its portfolio company as it focuses on investments after a $200 million fundraise last year, according to Satoru Arakawa, partner at J-STAR.
Yuki Kashiyama joined the firm in February as the only team member with a solely management background, having worked at Boston Consulting Group in Japan and set up his own biotechnology business in the US and Chile.
He is entirely dedicated to post-investment activities and will work closely with the management teams of J-STAR’s portfolio companies, using his experience in strategy, innovation management, business development, and international operations.
“We haven’t [previously] divided the roles into [investment] and operations people like larger funds. Our people continue to engage in every aspect of the investment phase, but we think [now] we need people dedicated to operational improvement because our portfolio is now increasing [in size],” Arakawa said in an interview with Private Equity International.
In July last year J-STAR closed a $200 million Japan fund, focusing on small- to mid-cap investments. The fund is now actively investing, increasing its assets under management rapidly.
“We are more focused on portfolio investments and operational improvement [now] so we’ve been seeking talent that has actual operating experience,” Arakawa added.
“Kashiyama-san has good experience, [having] started his own small technology company in California after he graduated his MBA. So he has a very unique background. We are basically investing in small- to mid-sized companies and those companies have a lot of issues. We think that the kind of boutique experience like Kashiyama-san’s can help those companies because they don’t need strategy or advice, they actually need help implementing solutions.”
Operational value-add is becoming increasingly important in Asia, particularly in low- or slowing-growth economies.
The topic was a key subject of discussion at PEI’s recent Asia Forum in Hong Kong. Speaking on a panel, Pacific Equity Partners’ founder Tim Sims, who operates in Australia, said, “We as a private equity community should be alert to [the value of operational improvement] and feel a responsibility to make sure that we know what drives our business returns – it is not growth. It is the unique insight into what you [can] add in future value to the thing you buy.”