SBI Holdings has signed an agreement with Goldman Sachs to jointly invest in middle-sized growing companies in Japan under which Goldman will acquire 40 per cent of its buy-out and enterpr
SBI Holdings has signed an agreement with Goldman Sachs to jointly invest in middle-sized growing companies in Japan under which Goldman will acquire 40 per cent of its buy-out and enterprise revitalisation funds unit, SBI Capital.
According to the firms, SBI Capital will draw on the combined strengths of SBI Holdings, a leading Japanese venture capital groups with a broad client base and extensive investment experience, and Goldman Sachs, a leading investment bank with a strong capital base and global investing track record.
With an average internal rate of return exceeding 20 per cent for the 2006 financial year, SBI Capital has a strong track record, primarily in the buy-out area. Recent investments include Foodx Globe, the parent of Tully’s Coffee Japan, and CEM Corporation, a mortgage lender. SBI Capital was the first private equity firm in Japan to relisting a company that had been delisted in Kawaden Corporation, a now thriving manufacturer of industrial electronics.
SBI E*Trade Securities, Japan’s largest online brokerage firm and a major underwriter of IPOs, provides a direct link for SBI Capital’s portfolio to the public markets. The Joint venture with Goldman is intended to replicate this value-creation formula.
SBI Capital will continue to manage its existing buy-out and restructuring fund, as well as to launch new funds targeting high-growth potential targets. The joint venture aims to deploy JPY100bn (some USD820m) within three years on investments not restricted to Japan or to any specific industry or sector.
SBI Holdings’ operations span three main business areas, asset management including venture capital, brokerage and investment banking, and internet-enabled financial services. In addition to managing a family of venture capital funds, many of the firm’s 70 companies are leading players in online financial services such as equities and commodities broking, home equity loans, and insurance comparison.
Internationally, the firm recently formed international partnerships with groups controlled by Singapore’s Temasek Holdings and State Bank of India. SBI also plans to launch Japan’s first full-service internet bank this year in partnership with Sumitomo Trust & Banking, as well as a life insurance business with Axa Japan and a non-life insurance company with Aioi Insurance.
