Marunouchi eyes final close on second Japan fund in Q2 – exclusive

The Mitsubishi Corporation-backed firm expects to raise capital from an Asian investor for its second offering, whose LPs are mainly domestic financial institutions.

Japanese private equity firm Marunouchi Capital is set to hold an approximately ¥100 billion ($950 million; €770 million) final close on its latest fund in the next quarter, Private Equity International has learned.

The firm expects to close on target after more than a year on the fundraising trail. Marunouchi’s ¥100 billion target is more than twice the average size of its peers. Last year, 12 Japan-focused funds closed on or above target, collecting an aggregate of $4.7 billion, according to PEI data. The average size for these funds is approximately $400 million.

Haruyasu Asakura, president and chief executive officer told PEI the firm expects an Asian institutional investor to commit capital to the fund. The firm’s LPs are mainly Japanese banks and financial institutions.

Fund 2 will have the same strategy as Fund 1, the 2008-vintage debut fund that closed on ¥100 billion, of which more than half has been deployed, PEI understands.

Acquisition targets are mainly large-scale corporate carve-outs and succession-led deals in various industry sectors including consumer/retail, manufacturing and industry goods, Asakura added.

The firm typically invests between $30 million and $200 million per deal, which could go as much as $500 million for co-investments. Marunouchi is backed by Mitsubishi Corporation and The Bank of Tokyo-Mitsubishi UFJ and has the capacity to access deals through its investors’ network.

In addition to wrapping up the fundraise, Asakura said the firm is looking forward to “doing more deals” this year.

“There’s a wider acceptance of private equity transactions in Japan now compared to a decade ago. Previously selling of businesses to private equity was taboo, however various stakeholders including founder-owners now recognise that firms not only inject capital but also boost the business for expansion as they see more successful cases happening,” Asakura said.