Daiwa Securities SMBC Principal Investments and Quantum Leaps will set up a private equity joint venture to invest in Japan, India and China. The JV is expected to be closed in April and is targeting a raise ¥30 billion ($307 million). It plans to invest in technology-oriented growth companies in Asia.
Last August Daiwa had announced that it is looking at a 500 billion yen ($5.4 billion) Asia fund, which it scrapped earlier this year. Daiwa's talks for the private equity fund with Blackstone (who was to be the co-sponsor of the fund) failed to materialise. After that it had decided to raise a smaller $200-300 million fund.
The fund aims to act as a bridge between Asia and Japan, with an investment focus on providing support for Asian companies to grow by acquiring technologies and management skills from Japan and also for Japanese companies to expand their businesses in Asia.
The fund plans to invest 70% of its assets in Asia, particularly China and India and the rest in Japan.
Nobuyuki Idei, founder and CEO of Quantum Leaps, says the fund will help create new value in Asian companies by providing risk capital. Idei will serve as the chairman of the JV.
"The financial turmoil triggered by the subprime mortgage crisis continues to have serious and wide-ranging negative repercussions. Now more than ever, we need bold new initiatives that will spur innovation in Japan and Asia. Our joint venture company aims to bring together the technological prowess of Japanese companies with the growth potential of Asian economies to create new value and Pan-Asian prosperity and harmony. Utilizing a network of the best and brightest CEOs of Japan and Asia, we hope to manage a fund unlike any other," he said.
The JV looks to leverage Idei's broad network with top management throughout Asia for access to high quality deals.