Bain Capital doubles down on Japan with $34 billion investment

Boston-based Bain Capital, one of the world’s leading private investment firms, is planning a significant expansion in Japan by investing approximately $34 billion (or around 5 trillion yen) over the next five years.

Bain Capital Partner Masashi Suekane said in an interview with the Japan Times there are highly segmented industries in the country, especially automobile parts and basic materials sectors, that are expected to realign and consolidate their activities.

According to Co-managing Partner David Gross, who also heads the firm’s Asia operations, Japan already plays a pivotal role in Bain Capital’s investment strategy, accounting for roughly 30% of its portfolio in the region.

“There’s no other market of this size that has this number of opportunities other than Japan. That’s why Japan has been very important to us,” said Gross, adding that over the past decade, Bain Capital has already poured more than $5 billion into Japan.

In recent years, Bain Capital has made notable acquisitions in the country. Last year, it acquired Evident, a subsidiary of Olympus and a maker of medical-grade microscopes, for $3.1 billion. In 2018, it led a consortium that purchased Kiozia Holdings, a Japanese semiconductor manufacturer, for $18 billion, then the largest private equity deal in Asia.

Both Evident and Kioxia are expected to go public this year, marking a significant milestone for the Bain Capital.

Looking ahead, the U.S.-based firm shared plans to bolster its Japanese workforce and increase investments in Japanese-backed life sciences projects, particularly in new drug development.

Once seen as a stagnant market, Japan has become increasingly attractive to global investors because of the Bank of Japan’s decision to keep its interest rates very low while other central banks slowly raise their rates.

“Shareholders and corporate managers in Japan are becoming increasingly focused on capital efficiency,” Suekani said.