Carlyle, Warburg among investment firms hunting talent in Japan as deals boom

Fuji Soft

12/11/2024 05:32

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      Carlyle aims to add 10 more people in next two years 
    

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      Warburg Pincus, Advent International plan Tokyo offices
-sources
    

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      Many vacancies open across PE, property and infrastructure
funds
    

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      Long history of low-level M&A in Japan making headhunting
hard 
    

  
    By Kane Wu
       TOKYO, Nov 12 (Reuters) - Carlyle, Warburg Pincus and a
host of global investment firms plan to beef up headcount in
Japan as deals here surge, but the country's relatively low
number of buyouts for much of the past two decades has made it
tough to find people with expertise.
    Carlyle  CG.O , which has been investing in Japan for more
than two decades, raised $2.8 billion for its fifth and largest
Japan buyout fund in May.
    It wants to add 10 more people to its local 25-strong
investment team in the next two years, said Takaomi Tomioka, the
firm's co-head of Japan.
    "We are planning to invest about a hundred billion yen per
year across three to four transactions," he said. "In order to
execute that number of transactions and while at the same time
managing portfolio companies, we need to enhance the team." 
    U.S. buyout firm Advent International has been talking to
senior private equity professionals in Japan in recent months,
seeking to establish a local office and an investment team in
Tokyo, said two people familiar with its plans.
    Warburg Pincus  WP.UL , which this year hired former Goldman
Sachs banker Takashi Murata as head of Japan and co-head of Asia
real estate, is also looking to set up a Tokyo office and grow
its local team, said two separate people. 
        It has added three people to cover Japan since Murata's
hiring, said one of the two sources.
    Advent and Warburg declined to comment. The sources were not
authorised to speak to media and declined to be identified.
    The hiring spree underscores the intensity of dealmaking in
Japan, which has been a rare bright spot amidst a slowdown in
M&A deals globally over the last couple of years.
    Japan became the largest market for private equity deals in
Asia-Pacific last year accounting for 30% of the region's total
deal value, largely driven by take-private deals, according to a
report by consultancy Bain & Co. That compares to a much smaller
figure of 5% to 10% historically.
    Potential deals that have grabbed headlines include
Alimentation Couche-Tard's  ATD.TO  takeover offer for Seven & i
 3382.T  as well as KKR  KKR.N  and Bain Capital's bidding war
for software developer Fuji Soft  9749.T .
         
    'ACCELERATED HIRING'
    Overall, private equity, real estate and infrastructure
funds currently have dozens of Japan vacancies that range from
senior management to entry-level positions, dealmakers and
recruiters say.
    A senior dealmaker with a global buyout fund in Tokyo said
he has fielded calls from at least three other firms this year
who were looking to set up shop in the country. He declined to
be identified.
    The number of fund managers with a Japan office and a latest
buyout or turnaround fund worth at least 50 billion yen has
doubled between 2012 and 2024, with more new investors ready to
enter the market, the Bain report said.
    "The surge in private equity deal activity in Japan has
significantly accelerated hiring within the industry over the
past few years," said Gavin Smith, managing director at
Tokyo-based Atlas Recruitment which is looking to fill nearly 60
investment roles in Japan.
    But hiring has become more competitive in the last three
years, said Smith, as the pool of available candidates is not
deep enough to satisfy soaring demand.
    Taku Maeda, managing partner of buyout firm Corporate
Support Research Institute (CSRI), said that with more and more
money coming to Japan, the lack of fund managers is likely to
become a bottleneck.
        CSRI, which raised 25 billion yen in its mid-cap maiden
fund this year, plans to add three to four people to its
five-member team by April, Maeda said, but added he was "a
little bit worried about the gap between the money inflow and
people inflow."

($1 = 153.74 yen)

 (Reporting by Kane Wu; Editing by Sumeet Chatterjee and Edwina
Gibbs)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))