Carlyle Group (CG.O) said it has raised 258 billion yen ($2.3 billion) for its biggest Japan fund to date, aiming to pick up businesses shed by conglomerates as well as companies where elderly owners have no obvious successors.
It is the U.S. buyout firm’s fourth Japan fund and is more than twice the size of the third, which raised 120 billion yen.
“More conglomerates are expected to become serious about selling their non-core businesses over the next several years and that will be our opportunity, which is why we doubled the size,” Kazuhiro Yamada, representative for Carlyle Japan, said in an interview.
The new fund, which matures in 2026, will likely split its money equally between deals resulting from corporate asset sales and succession deals, he said.
Corporate asset acquisitions will likely be range between 20 billion yen and 40 billion yen, he said, adding that for larger deals, Carlyle will also use money from other funds in Asia, Europe and the United States.
Encouraged by a Japanese government drive to improve corporate governance, activist investors are pressuring more companies such as brewer Kirin Holdings Co Ltd (2503.T) to shed non-core businesses. Conglomerates with many subsidiaries are also under pressure to slim down and improve returns for shareholders.
Carlyle is keen to find companies that weather economic downturns well as the economy is bound to deteriorate due to the coronavirus pandemic, Yamada said.
Other big funds are also targeting Japan. These include Apollo Global Management which opened up offices in Tokyo last year and Blackstone Group (BX.N) which established a buyout team in Japan in 2018.
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