U.S. investment fund Bain Capital will invest a total of ¥5 trillion in Japan over the next five years, a senior official said in a recent interview.
Japan has many “highly segmented” industries, says Masashi Suekane, a partner at Bain Capital, who predicts that realignment and consolidation activities in the auto parts and basic materials industries will intensify.
Regarding the environment in which Japanese companies operate, Suekane said: “Shareholders and corporate executives are becoming increasingly sensitive to capital efficiency.”
He expects that reorientations will take place to increase competitiveness in all groups of affiliated car manufacturers and among all partner suppliers.
As the basic materials industry faces a greater need for huge capital investments, Suekane said “niche market leaders cannot compete globally”. He stressed the importance of expanding their business scale.
Bain Capital plans to expand its workforce in Japan. It has set up a special team to help Japanese companies make effective use of their low-profit real estate assets.
In addition, Bain Capital hopes to invest in new drug development projects by Japanese companies, in partnership with investment funds it operates in the United States.
Bain Capital led a consortium that acquired Japanese semiconductor maker Kioxia Holdings for about ¥2 trillion in 2018. Kioxia, formerly Toshiba Memory, is expected to go public later this year after a recovery in the chip market.
Suekane declined to say when Kioxia would go public, but said the company’s results “are going to be very good.”
Last year, the US fund spent ¥400 billion on the purchase of Evident, to which Olympus transferred its founding activities: scientific activities, including the production of microscopes.
Evident and Proterial, formerly Hitachi Metals, which Bain Capital acquired from Hitachi, are also expected to go public, Suekane said.
