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Private equity firm CVC to invest $1.4bn in Japan market

Group will target companies with solid operations but in need of cash

Tokyo's Marunouchi business district: CVC's investment push in Japan is backed by its new Asia-Pacific fund that raised $4.5 billion earlier this month. (Photo by Akira Kodaka)

TOKYO -- CVC Capital Partners will invest roughly 150 billion yen ($1.39 billion) into the Japanese market over the next several years, said Atsushi Akaike, the global private equity firm's head of Japan.

The firm raised $4.5 billion for a new Asia-Pacific fund in early April, exceeding its $4 billion target thanks to investors hungry for opportunities amid rock-bottom interest rates. The new fund attracted big pension funds from the U.S. and Europe, as well as a larger proportion of Asian players. About 30% of its investments will be made in Japan.

"Investment funds have been involved in relatively expensive acquisition deals for the last few years, so we have not been investing as much," Akaike said. "In fact, we've prioritized selling our assets."

Atsushi Akaike, head of Japan for CVC Capital Partners 

But given recent economic conditions, "we want to consider investing in companies that have strong operations, but are temporarily short on cash," he said.

CVC expects that it will take years for the global economy to completely recover from the coronavirus pandemic. It believes its fund can help with structural challenges faced by Japan's companies in the meantime, like succession planning and cuts to noncore operations.

"If there is a chance to buy overseas assets for cheap, we will consider making the acquisition jointly with a Japanese company," Akaike said. He said CVC could take additional contributions from its investors or tap funds focused on other regions to invest up to billions of dollars into a single target.

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