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

By Kane Wu

TOKYO (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, 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, 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 takeover offer for Seven & i as well as KKR and Bain Capital’s bidding war for software developer Fuji Soft.

‘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 (NYSE:) 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.”

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