Hong Kong- and Tokyo-based The Longreach Group announced today the final close of two debut Japan-focused buyout funds at a hard cap limit of ¥82.5 billion ($750 million; €607 million).
The choice of two investment vehicles – one Cayman Islands-registered and the other Ireland-registered – was designed to give investors greater flexibility. Limited partners were also given the option to invest either in Japanese yen or US dollars, Longreach Group chairman and partner Mark Chiba told PEO in an interview.
The debut funds attracted financial institutions, public and private pension funds as well as university endowment funds. Investors originated mostly from the US, but commitments also came from Japan, said Chiba.
The funds will focus on Japan-related, control-oriented private equity investments, with a particular focus on buyouts in the established technology and financial services sectors, according to a statement from Longreach.
In the statement, Chiba said: “The funds’ size, combined with co-investment appetite from our limited partners and other investment partners, enables us to execute our investment strategy, especially in relation to larger strategically driven buyout opportunities in Japan.”
Longreach held a first close in June 2004, on commitments from two large Japanese LPs, following which commitments from global financial institutions from the US started flowing in, Chiba said. The funds had an original target of $500 million, before being given a hard cap of $750 million.
Longreach made its first investment from the debut funds last year, when it acquired a 24.98 percent stake in MacDonald’s Japan. Between now and through next year, Chiba expects to make between six and 10 investments, each averaging $100 million from the debut funds plus co-investments.
Longreach was established in October 2003, and headed by Chiba, a former president, CEO and head of Japanese investment banking at UBS Securities in Tokyo.
The firm engaged California-based Denning & Company as its exclusive placement agent for the fundraising.