Japan’s MKS to halt investments

One of only a few prominent Japanese buyout firms will seek to sell its stakes in three portfolio companies.

MKS Partners, one of the three big Japanese private equity houses, is reportedly halting new investments, and selling its stakes in three unlisted portfolio companies due to the financial crisis, according to Reuters, which cited “a person familiar with the fund”.

The firm, which manages Y60 billion (€490 million; $621 million), lists on its website stakes in socks manufacturer Fukusuke Corp, consumer goods producer Kracie Holdings, electrical appliance maker LaOX, and Dowa Works, which makes newspaper folding machines.

MKS will cut its staff to about 10 from 15 by the beginning of next year. The remaining staff will work on the existing portfolio, including looking for buyers for the stakes. The firm will allow about a year to sell the stakes, the report said.

MKS manages two funds, MKS I and Japan Fund IV. It was established in 1982 as Schroder Ventures KK, venture capital firm. MKS gradually shifted its focus to private equity. Of the firms 60-some deals to date, 14 are private equity, it says on its website. The firm conducted a management buyout from Schroders to become independent in 2002.

The firm is run by managing partner Nobuo Matsuki, who started his career at a sales unit of Toyota Motor Corp.

Last year, the firm lost one of its partners, Naohiko Kitsuta, to Kohlberg Kravis Roberts, who recruited him as a managing director for its Japan office.

Other prominent local buyout firms in Japan include Unison Capital and Advantage Partners. The Carlyle Group has also been a major player in the nascent Japanese buyout scene.