Mitsubishi Corporation, one of Japan’s largest general trading companies, and Mitsubishi UFJ Securities, the investment banking arm of Mitsubishi UFJ Financial Group, are setting up a ¥100 billion ($1 billion; €635 million) buyout fund to invest in Japanese companies.
The fund will make investments in companies that are “in need of capital for business integration, spinning-off non-core divisions or subsidiaries, growth stage business or joint investment,” the firms said in a statement. Capital will be provided to companies either in the form of stock, convertible bonds and subordinated debt.
The fund will be managed by a fund management company which will be formed as a 50:50 joint venture between the two firms. The fund will be set up in April 2008 and will have a five year investment period.
Mitsubishi Corporation and the Mitsubishi UFJ Securities will also invest in the fund along with Bank of Tokyo-Mitsubishi UFJ, another subsidiary of the Mitsubishi UFJ Financial Group.
Mitsubishi Corporation will contribute 49.5 percent of the fund’s capital, Mitsubishi UFJ Securities 4.5 percent, and Bank of Tokyo-Mitsubishi UFJ will contribute 45 percent, with the fund management company providing one percent, the statement said.