Citic Unit Plans Japan Private Equity Fund as China Buying Jumps

  • 30 billion yen fund has invested in Akakura, Mark Styler
  • Chinese firms made $572 million Japan acquisitions this year

A Citic Group Corp. unit plans to raise about 30 billion yen ($299 million) for a fund that will make private equity investments in Japan, as Chinese firms buy Japanese assets at the fastest pace in at least a decade.

Citic Capital Partners Japan Ltd.’s fund will put as much as 5 billion yen in each company in which it invests and has already made investments in women’s shoemaker Akakura and apparel firm Mark Styler Co., according to Hironobu Nakano, a senior managing director at the Citic unit.

“We’ve been talking with managers who want to expand their Chinese operations,” Nakano said in an interview. For Japanese companies, “doing business in China is difficult on their own, and they need the support of funds like ours,” he said. His firm has helped Japanese firms work with Chinese counterparts, according to Nakano.

Chinese companies have announced $572 million of acquisitions in Japan this year, the most since at least 2006 according to data compiled by Bloomberg, including Midea Group Co.’s purchase of Toshiba Corp.’s home-appliance division. While the deals this year are an increase from $371 million during the same period in 2015, they are still dwarfed by the $44.5 billion in announced Chinese acquisitions in the U.S., the data show.

The Citic fund will aim for an internal rate of return of at least 25 percent, Nakano said. The fund is the third of its kind in Japan from Citic, and the previous one raised 18 billion yen, he said.

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