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Goldman Sachs Sells Stake in Japan Golf Course Owner

Jan. 6 (Bloomberg) -- Goldman Sachs Group Inc. is selling its stake in Accordia Golf Co., ending an almost decade-long investment in the sport in Japan as player numbers fall.

A Goldman Sachs investment unit will sell 470,587 shares in Accordia, the Tokyo-based golf operator said in a statement today. The stake is worth about 37 billion yen ($445 million) based on today’s closing price. Accordia’s stock has lost 60 percent since Goldman Sachs took the company public in 2006.

Goldman Sachs spent more than 3 trillion yen since 1997 on assets in Japan, including golf facilities and office buildings. The nation’s golf-course industry has been in decline since an asset bubble burst 20 years ago, and is unlikely to return to its former glory as the population shrinks and the economy stagnates, said Daisuke Seki of IB Research and Consulting Inc.

“Goldman must have judged it’s time to sell as it can’t expect any upside from the shares, and the move suggests the bank will exit from other real estate investments in Japan,” said Seki, chief executive officer at the Tokyo-based firm. “Golf is a luxury. Playing numbers are falling because of the declining population and weakening economy, as well as companies choosing not to entertain clients on the course.”

Accordia shares, sold in the IPO for 195,000 yen, fell 1 percent to 78,900 yen in Tokyo today before the announcement. Goldman Sachs owns a 45 percent stake in the company. Goldman raised about 100 billion yen from the IPO.

Bankrupt Clubs

Daiwa Securities Group Inc.’s investment banking unit and Goldman Sachs will underwrite the share sale, according to the statement. They will sell the shares to investors in Japan, Asia and Europe, and decide the price as early as Jan. 17.

Hiroko Matsumoto, a Tokyo-based spokeswoman at Goldman Sachs, declined to comment on the sale. She also declined to comment on returns from its investment in the golf business.

Accordia last month cut its profit forecast to 11.4 billion yen for the year ending March 31, from 12.1 billion yen. It posted a 10.4 billion yen profit a year earlier. The stock slipped 19 percent in the past year while the Topix Index was little changed.

Goldman Sachs, which made its first investment in Japan’s golf industry in 2002, owned 131 courses as of Dec. 31 according to its website.

Golf membership prices soared in Japan during the 1980s bubble economy, then slumped as the country fell into four recessions in the past two decades. At least 800 golf clubs have gone bankrupt since 1991, according to Meiji Golf, which trades club memberships in Tokyo.

Membership values at Accordia-owned courses have fallen faster than the nationwide average, Kazunari Tsutsumi, executive director of Meiji Golf, said in July last year.

Goldman Sachs at times faced challenges to acquire and operate the golf courses. It lost management control of bankrupt Nanso Country Club outside Tokyo last year after a court accepted a petition by members to remove executives appointed by the U.S. firm.

To contact the reporter on this story: Takahiko Hyuga in Tokyo at

To contact the editor responsible for this story: Philip Lagerkranser at

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