After a decade in the economic doldrums, Japan still has at least one growth industry: investing in distressed companies. At any rate, that's the premise behind Nippon Mirai Capital, founded last December by former Industrial Bank of Japan executive Akira Yasujima. Although the distressed-investing firm has yet to do a deal, it has no fewer than 20 in play, contends its CEO.
The 47-year-old Yasujima has the kind of powerful allies deal makers need. They include the Development Bank of Japan, which has invested directly in Nippon Marai; Richard Gitlin, ex-chairman of Insol International, a London-based association of turnaround lawyers and accountants; and Toshihiko Fukui, a widely respected former vice governor of the Bank of Japan.
Yasujima is confident that Nippon Mirai enjoys substantial competitive advantages over foreign rivals, starting with its network of bank, corporate and adviser contacts. He maintains that his firm can identify troubled companies before they appear on competitors' radar screens.
"Most of the funds in town are either management buyout specialists that know how to reorganize troubled companies and understand equity, or else they're vulture-type funds that are experts on debt disposal," he notes. Nippon Mirai aims to be both.
To illustrate his firm's home-field advantage, Yasujima points to U.S. private equity firm Ripplewood Holdings, which bought Long-Term Credit Bank of Japan in 2000. "I know [Ripplewood CEO] Timothy Collins, and he's taking so much risk," he says. Yasujima adds that foreign firms lack the deal network to identify distressed companies "upstream," when they're still a bargain.
Naturally, Ripplewood sees things differently. Atsushi Kuse, the firm's Tokyo spokesman, says that its Japanese investments have mostly turned out well.
Japanese worry that foreign firms like Ripplewood will take advantage of the economy's travails and snap up their country's choicest assets. Nippon Mirai -- rough translation: "Japan's future" -- represents a homegrown alternative.
