PAG, the Asian private equity and investment firm, has made its first corporate investment in Japan, taking a $250m stake in Universal Studios Japan.
The money will go towards recapitalising the theme park operator and help Universal launch its Harry Potter attraction, as well as giving management more control over the company.
The deal is one of the few private equity transactions in Japan since Shinzo Abe came to power. This is despite hopes that there would be a transformation of Japan Inc as companies shed assets and speed up the consolidation that most analysts think inevitable.
There have been only 10 deals in Japan this year. Only one of them, KKR’s $1.7bn buyout of Panasonic Healthcare, was valued above $500m, according to data from Dealogic.
PAG has invested heavily in real estate in Japan but this is the first time the firm, which has about $10bn under management, has put money to work in a corporate deal there. Last year it raised $2.5bn for a private equity fund under chairman and chief executive Shan Weijian, the former TPG rainmaker, and has already realised $1bn from its investments.
PAG is one of a new generation of private equity firms based in Hong Kong and China headed by people who grew up locally, in contrast to the big international firms which in many cases prefer to send their own from head office.
Mr Shan has been able to source more buyout deals in China and successfully exit them than most of his competitors. Two-thirds of his deals have been buyouts rather than minority stakes in listed companies.
His deals include Sanctity Pharmaceuticals; Funtalk China, a retail platform for smartphones that he delisted and took private; as well as car leasing and services.
“One can much better time one’s exit if one has control. It is like travelling on a bus,” Mr Shan said. “A minority shareholder is like a passenger who takes a ride and cannot dictate which exit to get out. But a controlling shareholder is the driver who decides which exit to take.”
PAG joins shareholders including Goldman Sachs in the Universal Studios investment.
Glenn Gumpel, an American, has turned the company round and introduced a more decisive management style.
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