Merrill shuts Japanese private equity office

Merrill Lynch Global Private Equity has shut down its Tokyo office four years after setting up there. The firm has not closed a deal in Japan.

Merrill Lynch Global Private Equity, the private equity arm of the investment banking group, has shut down its office in Japan. The firm's Tokyo office, which was set up in 2005, closed recently, a spokesman for the group confirmed.

The office had two investment professionals: Terutomo Mitsumasu, manging director and regional head of the firm’s operations, and Hidetoshi Shibata, also a managing director. According to a source close to the matter, both have left the firm.

The firm has not closed a transaction in Japan since it began operations there, the source added.

Merrill Lynch Global Private Equity generally invests between $250 million and $750 million in businesses globally, with a focus on the US, Europe, China, India, Latin America, Australia and formerly Japan. It employs a team of 68 professionals across offices in New York, London, Sao Paulo, Hong Kong, Tokyo, Mumbai and Sydney, according to its website.

In March, the bank’s private equity group laid off “many” of the members of its Australian team, according to Australia’s Financial Standard. A spokeswoman for the bank declined to comment on the report, which stated that the firm’s Australian team was being scaled down.

Merrill Lynch was merged with Bank of America in October last year in a $50 million all stock deal. In March this year James Forbes, a 14-year veteran of Merrill Lynch, was appointed as the head of Bank of America Merrill Lynch’s Global Principal Investment business that houses the combined companies’ private equity and real estate arms.

Also in March, Hong Kong-based Timothy Grady, who was responsible for managing the Merrill Lynch Asian Real Estate Opportunities Fund, left the firm, sources close to Grady said.

Japan has been an extremely difficult market for foreign private equity firms to establish a foothold in. In recent weeks, Unitas Capital, the buyout firm formerly known as CCMP Capital Asia, and UK-listed mezzanine capital provider Intermediate Capital Group, shut down their offices in Japan. In February, Florida-headquartered Sun Capital Partners closed its Tokyo office as well. Kohlberg Kravis Roberts and Permira retain their offices in Japan but have lost one senior executive each in recent months.