INSUBCONTINENT EXCLUSIVE:
States , the smaller country offers much more attractive opportunities
(Private equity investment value in greater China, including domestic yuan funds, averaged $72 billion annually in the past five years,
compared to just $9 billion in Japan.) The mainland features growth companies galore and easy exit opportunities through initial public
offerings in Hong Kong, the United States and soon, for tech firms, Shanghai.
Private-equity companies from around the world have raised
billions of dollars to invest in China, hoping to take advantage of its domestic consumption story and tech frenzy
Even KKR has bought into Chinese firms such as pork producer Cofco Meat Holdings Ltd
and personal-finance platform Shenzhen Suishou Technology Co
only minority stakes are available for purchase
They house a slew of underloved or non-core assets: About a quarter of the companies on the Nikkei 400 have 100 or more subsidiaries apiece,
KKR, which has been in Japan since 2010 and invested in six carve-outs since then, has put this strategy to work with the healthcare
business of Panasonic Corp., which it acquired in 2013
In 2016, KKR also bought auto-parts maker Calsonic Kansei Corp
from Nissan for $4.3 billion
government now actively supports such buyouts, a big change from the insular boom years when private equity firms were decried as rapacious
There was remarkably little public backlash after Toshiba sold off its crown jewel, or when Nissan sold Calsonic
That means slimming down unwieldy conglomerates and revamping management at underperforming companies.
Foreign private equity firms can help
do both, and then get these essentially mature businesses to expand globally.
