Longreach completes final investment from second fund

By acquiring business process outsourcing company Nippon Outsourcing Corporation, The Longreach Group's $400m second fund is now fully invested.

Hong Kong-based private equity firm The Longreach Group has made its fifth and final investment from its $400 million North Asia-focused buyout vehicle Longreach Capital Partners (LCP) II.

This week the firm acquired business process outsourcing (BPO) company Nippon Outsourcing Corporation (NOC) from Olympus Corporation, the firm said in a statement. Financial terms of the transaction were not disclosed.

Counting this investment in NOC, the firm has fully deployed LCP II. Other investments from the fund include food chain Wendy’s Japan, bridal jewellery company Primo Japan, plastic parts manufacturer Sol-Plus, and micro drilling machine manufacturer Hitachi Via Mechanics.

Longreach, with approximately $1.4 billion under management, focuses on industrial technology, financial services, and consumer-related investments in Japan and China.

Limited partners in the firm’s funds include the Korea Investment Corporation, Pension Fund Association of Japan, and the University of Michigan, according to PEI data.

Tokyo-based NOC, a subsidiary of camera maker Olympus, provides administrative and back-office support such as human resources, accounting, customer relationship management, and logistics to Japanese companies.

Corporate carve-outs is a key theme of Longreach’s private equity business – four of five investments from LCP II are carve-outs of non-core units. In 2010, Longreach also bought the logistics business of Japanese electronics giant Sanyo.

“The trend in corporate carve-outs is healthy, very steady, and continuing to grow,” Mark Chiba, group chairman and partner at Longreach told PEI.

The firm’s investment will be used to expand NOC in the local market and to broaden its customer base with global clients operating in Japan.

“With the overall BPO market in Japan growing steadily at around 4 percent a year, our aim is to realise further expansion in the Japanese BPO market as well as to identify and tap into underserved segments including foreign-owned businesses,” Chiba added.