The Longreach Group has reached a final close of $400 million for its second fund. The private equity firm will continue targeting control investments in Japan and North Asia, with a particular focus on the mature industrial and technology space, financial services, business services and consumer-related sectors.
AVCJ reported last month that Longreach was expected to complete fundraising by the end of September and the fund officially closed on September 30. Longreach Capital Partners 2 has spent more than two years in the market. It held a first close of $135 million in March 2011, and had to scale back its initial overall target of $750 million.
Longreach Capital Partners 1 closed at $750 million in April 2006. Investments include McDonald's Japan, Japanese cable company OCC Corporation, mobile content provider Cybird Holdings, China's Asian Aluminum Group and Taiwan's EnTie Commercial Bank.
Longreach also bought the electronics giant Sanyo's logistics business, and corporate carve outs are expected to remain a key theme in the Japan buyout market.
Many of the North American financial institutions that backed the GP's debut vehicle have since retreated from the asset class, while LPs in general remain wary about making large allocations to Japan funds.
However, a number of Asia-based investors committed to the fund while re-ups were secured from US endowments and foundations, according to sources in the LP community. New entrants include Korea Investment Corporation (KIC), Japan's Pension Fund Association and Pavilion Capital, the North Asia arm of Temasek Holdings.
Given KIC and Temasek's well-known focus on co-investment with portfolio GPs, Longreach's investment strategy and target ticket size are unlikely to change, despite the smaller fund corpus.
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