Japan’s Polaris Capital raises its largest ever fund

The mid-market buyout firm has raised more than $660m for Polaris Private Equity Fund IV.

Japanese private equity firm Polaris Capital Group has closed its latest buyout fund on its ¥75 billion ($668 million; €612 million) hard-cap, according to a statement.

The firm launched Polaris Private Equity Fund IV in the fourth quarter of 2016 and reached a first close of ¥52 billion in late January, of which more than half of commitments came from domestic LPs.

The firm said it received strong interest from both Japanese and overseas investors including banks, securities houses, life insurance companies, corporate pensions and government institutions.

Among investors in the firm’s previous funds are Danish pension fund PFA Pension and The Organization for Small & Medium Enterprises and Regional Innovation of Japan, according to PEI data.

The firm will use capital from Fund IV to target Japanese medium-sized companies focused on manufacturing, consumer goods, retail, logistics and other services possessing strong brands or unique business models with potential to expand into the overseas markets.

Its predecessor, the 2012-vintage Polaris Private Equity Fund III, closed on ¥39.1 billion against a ¥30 billion target. Through Fund III, the firm has made investments in Japanese power supplier Yodehen and timber and building materials company Hivic.

Polaris’s Fund I closed on ¥29.6 billion in 2004 and is fully liquidated, while Fund II closed with ¥31.9 billion of commitments in 2007 and is fully invested.

Japan-focused private equity funds have raised $2.2 billion in just the first four months of 2017, dwarfing 2016’s fundraising total of $250 million and beating 2015’s $2.1 billion total, according to >PEI data.

Polaris could not be reached for comment by press time.