Japanese firm looks west for $200m fundraise

Iwakaze Capital, launched in 2008, is led by former Ripplewood Japan executive Kenji Ueda.

Iwakaze Capital, a mid-market focused buyout firm in Japan run by a former Ripplewood executive, wants to raise $200 million (¥ 20 billion) for its second fund.

Executives with the firm, which was formed in February 2008, were in New York last week to try and meet potential investors. One source told PEO Iwakaze would have trouble meeting its target by relying solely on limited partners in Japan, who are reluctant to open their wallets too wide for commitments.

Iwakaze is charging a 2 percent management fee on its fund and 20 percent carried interest after the return of called capital. The firm’s first fund collected $23 million for investments.

The firm will target investments at a minimum level of ¥400 million (€3.7 million; $4.5 million), with a target enterprise value of ¥1 billion to ¥20 billion. Iwakaze works in sectors like automotive; electronic components; industrial machinery, steel and metal; digital media and consumer products.

The firm expects to hold a first close in September, and a final close a year later in 2011. Young American Capital, a New York-based placement agent, is working with the firm on the fundraising.

The firm is led by Kenji Ueda, who was a representative director and managing director of RHJ International Japan and Ripplewood Japan for more than eight years. He is joined by Fuyuki Yamaguchi, who worked for MOVIDA and AIG Japan, where he worked with private equity investments. Jun Kiseki, the firm’s chief financial officer, worked as executive officer of mergers and acquisitions at Daiwa Securities SMBC.

Gonzo, a Japanese animation company, was Iwakaze’s first investment from its first fund. The firm invested $15 million (¥1.3 billion) for 80.6 percent of the company. Iwakaze also invested $2.24 million in AEMSS, an automotive die engineering/manufacturing company, for a 70 percent stake.