Carlyle on Japan hiring spree after new $3 billion buyout fund
Carlyle said it is on course to hire 10 investment professionals in Tokyo as it starts dealmaking for its latest ¥430 billion ($3 billion) Japan buyout fund.
The Washington-based private equity firm has already made four junior to mid-level hires this year, and aims to add six more by December, according to Carlyle Japan co-head Takaomi Tomioka. That will bring its total number of investment professionals in Japan to 35.
Private equity has found a sweet spot in Japan in recent years, where borrowing costs remain low and companies from large corporations to smaller family-owned businesses have become receptive to selling off operations. Investors are also more keen to allocate money to Japan-focused funds.
But the boom has also made recruitment increasingly competitive in the market, Tomioka said in an interview. "Many new funds that have set up in Japan are frantically trying to hire,' he said. "The competition is very intense.'
Carlyle's Japan expansion comes as U.S. President Donald Trump's tariff policies cloud the outlook for global businesses and investors. That has made evaluating new opportunities and exits via initial public offerings (IPOs) more complex, according to Tomioka.
Most of Carlyle's Japan investments have been in medium-sized companies with a domestic focus, helping to shield it from some of the global trade turmoil. The firm, now in its 25th year of business in Japan, is still on track to invest its planned ¥100 billion in the country for 2025, Tomioka said.
Carlyle is seeking an IPO this year for portfolio company Orion Breweries, Tomioka said, pointing to the Okinawa-based beermaker's locally focused consumer business as less likely to be impacted by the trade ructions. Carlyle took Orion private in 2019 with the investment arm of Nomura Holdings.
Tariff policies have also had little influence on the factors driving dealmaking for private equity in Japan, according to Tomioka. Intensifying pressure to improve shareholder value is spurring local companies to go private or sell off non-core operations, and many smaller businesses face succession issues, he said.
"There is a significant deal flow,' he said. "However, we need to be cautious about whether the companies we evaluate for investment can actually execute their business plans as planned within the current global economic environment. That assessment is crucial.'
Most recently, Carlyle has acquired KFC Holdings Japan and is in the process of privatizing software provider Kaonavi.
Carlyle's latest Japan buyout fund, its fifth, finished fundraising last year and is about 70% bigger than the previous one. Appetite was so strong that it sapped investor interest from a separate Carlyle pan-Asia buyout fund, it was reported last year.
Japan-focused funds have drawn investment during a period of stagnant fundraising. The share of private equity capital raised focused on the country rose to 15% of the Asia-Pacific total last year from 7% in 2019, according to a report from Bain & Co.
In the current global environment, Japanese companies that are focused on domestic businesses and not expanding globally are actually very appealing, Tomioka said.
"They are easier to invest in right now, and many are in our pipeline,' he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
3 hours ago
- Japan Times
Japan's firms see business climate worsen amid U.S. tariff hits
Japan's largest businesses turned pessimistic for the first time in more than a year as U.S. President Donald Trump's sweeping tariffs upended key sectors, a development that could complicate the Bank of Japan's policy path. The Business Sentiment Index for large firms registered minus 1.9 for the April-June quarter, slipping into negative territory for the first time since the first quarter of 2024, according to a Finance Ministry survey released Thursday. A negative figure indicates that more companies reported deteriorating conditions than those that saw improvements. Among large manufacturers, sentiment dropped to minus 4.8, also the weakest in five quarters, driven by sharp declines in the automotive, auto parts and steel industries. Nonmanufacturers posted a reading of minus 0.5, turning negative for the first time since the third quarter of 2022, with the retail and telecommunications sectors weighing on the gauge. Thursday's data underscore growing anxiety among Japanese firms amid prolonged uncertainty over U.S. trade policies. Trump initially slapped 25% duties on steel and aluminum in March before recently hiking that rate to 50%. Autos became subject to 25% duties from April, and all other products were simultaneously hit with a 10% levy across the board, a rate that will revert to 24% for Japanese goods in early July, barring a trade deal. The data showed that industries most exposed to the elevated U.S. duties have seen particularly steep drops in sentiment. Automakers and parts suppliers reported a plunge to minus 16.1 from 8.8 in the previous quarter, while steelmakers' sentiment tumbled to minus 29.1 from 0. The bleak readings are likely to inject a degree of caution into central bank policy deliberations even after Gov. Kazuo Ueda reiterated his position earlier this week that rate hikes will proceed if and when conditions allow. The bank's policy board is widely expected to hold its benchmark interest rate steady when it next sets policy on June 17, with focus falling on updated plans for government bond purchases. The figures largely align with the government's latest economic view. Economic Revitalization Minister Ryosei Akazawa warned on Wednesday of rising downside risks to Japan's economy stemming from U.S. trade measures. Akazawa is expected to depart for Washington later this week for his sixth round of trade negotiations with U.S. counterparts.
Nikkei Asia
3 hours ago
- Nikkei Asia
US-China trade truce leaves businesses still facing daunting tariffs
NEW YORK -- The trade deal the U.S. and China hammered out in London this week still leaves American importers saddled with heavy tariff burdens and uncertainty on how to conduct their business, after President Donald Trump said levies of up to 55% would continue to be charged on Chinese goods. Trump on Wednesday also said he will be sending letters informing other countries of unilateral tariff rates in the next couple of weeks.
Japan Times
3 hours ago
- Japan Times
Couche-Tard sees ‘clear path' to Seven & I deal with U.S. stores divestment
Alimentation Couche-Tard says several potential buyers have made proposals to acquire its convenience stores in the U.S. that overlap with Seven & I Holdings, showing progress toward a deal that could help the Canadian retailer win regulatory approval for its proposal to buy its Japanese rival. The two agreed earlier this year to discuss the potential divestment of more than 2,000 stores in the U.S. and seek out interested parties in order to address concerns by Seven & I over a merger being blocked by the U.S. Federal Trade Commission. Couche-Tard also pushed back against any parallels to a failed $24.6 billion merger of grocery chains Kroger and Albertsons. Seven & I, which operates 7-Eleven, Speedway and Sunoco stores, has pushed back against Couche-Tard's unsolicited ¥7.39 trillion ($51.3 billion) takeover proposal and is overhauling its business under new Chief Executive Officer Stephen Dacus to raise its value. Despite the resistance, Couche-Tard, the parent company of Circle K, has advanced discussions by securing a non-disclosure agreement two months ago to gain access to financial information and potentially raise its bid. "We have received multiple indicative proposals from highly experienced and credible buyers,' Couche-Tard said on a website it set up to explain its proposal to buy Seven & I. "We believe the actionable, strong and broad level of interest so far clearly demonstrates that we have several clear paths to consummate the required divestitures and complete the transaction.' Several private equity firms have shown strong interest in buying the assets, Filipe Da Silva, Couche-Tard's chief financial officer, said in March. Couche-Tard also addressed some concerns over a potential merger by highlighting the differences between its proposal and the scuppered combination of Kroger and Albertsons. The FTC blocked the deal on antitrust grounds last year, saying that the divestiture plan was insufficient; Seven & I cited this as a high-risk factor for getting a deal with Couche-Tard approved. "The convenience store industry in the U.S. is highly fragmented and competitive,' Couche-Tard said. "The combination of Couche-Tard and Seven & i results in a business with less than 13% of U.S. convenience stores.' The Canadian retailer also reiterated that it has put "forth a compelling reverse termination fee' in the event of a transaction not going through.
