Bahrain’s Investcorp Opens Tokyo Office to Target Japanese PE, Real Estate Deals

Bahrain-based alternative assets manager Investcorp has opened an office in Tokyo, expanding its presence to Japan to target private equity and real estate opportunities in the world’s third-largest economy.

Investcorp has also tapped economist and former cabinet member Heizo Takenaka to serve as chairman of the company’s business in Japan. The move comes after Investcorp surpassed $50 billion in global assets under management in December.

The new office is located on the 12th floor of the Yurakucho Denki Building North Tower in Tokyo’s Chiyoda ward and currently has five people, with a view to grow the team by the end of the year, according to an Investcorp spokesperson.

Mohammed Alardhi, executive chairman of Investcorp, said in a prepared statement that the company plans to further expand its base of Japanese investors and bring new investment capital into the region, specifically from the Gulf Cooperation Council.

Gulf Investor Grows

Investcorp has existing relations with Japanese investors, who currently allocate more than $2 billion of assets under management to the company’s investment products. The firm has 13 other offices around the world and four others in Asia, including Mumbai, Delhi, Singapore and Beijing, with a team of 40 professionals operating across the region.

“In an era of high inflation and volatile currency fluctuations, coupled with aging demographics, Japan needs to promote foreign investment by sophisticated investors to improve return on assets,” Takenaka said in a statement. “Investcorp’s rich experience in global alternative investments would contribute to our wealth management industry at its inflexion point, which calls for a shift from savings to investments.”

Takenaka, currently a professor emeritus at Keio University and a professor at Toyo University in Japan, joined Prime Minister Junichiro Koizumi’s government as minister of economic/fiscal policy in 2001 and later added financial services and privatisation of the postal services to his mandate. He served as Japan’s minister for internal affairs and communications from 2005 to 2006.

Investcorp’s global portfolio is spread across three continents and six asset classes. In the real estate domain, the company has invested a total of $23 billion across roughly 1,100 properties in the US, Europe and India.

Investcorp announced its new Tokyo office in the same week that the company flagged the final closing of its debut North American private equity fund with over $1.2 billion in capital commitments. The vehicle focuses on family- and founder-led businesses across six industry sectors.

Betting on Japan

Institutional investors have flocked to Japanese real estate in recent years, drawn by a weak yen and low borrowing costs. Late last year, German asset manager Patrizia launched a €1 billion ($1.03 billion) fund to purchase core and value-add multi-family assets across Japan’s top cities.

Other investors active in the market include US private equity firm KKR, which bought a portfolio of 39 newly built apartment properties in Tokyo in December; Hines, which snapped up 11 Japanese multi-family properties on behalf of the US developer’s flagship pan-Asian fund in the same month; and French fund manager AXA IM Alts, which acquired 15 Japanese nursing homes for €156 million towards the end of the year.

Commercial property investment in Japan totalled $9.3 billion in the fourth quarter of 2022, according to data from MSCI Real Assets. Although that figure marked a 23 percent decline year-over-year, the country outperformed the rest of the Asia, which saw a 52 percent plunge in dealmaking during the same period.

Japan saw a total of $19.53 billion invested across 105 private equity deals last year, down from the 2021 peak of $29.19 billion across 132 deals, according to PitchBook data.