The rise of Ai Miyazato, a high-flying female golfer from Japan, could help bring the sport out of its slump in that country. While the 20-year-old Miyazato has already achieved rock star status amongst her throngs of Japanese fans, there is another sign that the sport is gaining popularity.
Over the past decade Japanese golf courses – once the symbol of the country's status as an economic powerhouse – became liabilities, defaulting on loans and declaring bankruptcy. They quickly became the perfect target for private equity real estate firms wanting to bet on distressed assets. Now, after extensive redevelopment, investment bank Goldman Sachs and Dallas-based firm Lone Star Funds are hoping to take their golf course portfolios to Japan's public markets.
Goldman Sachs recently said it planned to list its Accordia Golf Company on the Tokyo Stock Exchange next year. The firm began acquiring the distressed courses in 2001 and it now owns courses all over the country, including the Manju Golf Club in the Nara prefecture and the Narashino Country Club in suburban Chiba. Accordia was launched in 2003 and now has 78 courses and 5,000 employees.
Over the past two years, Accordia has worked to attract customers. Courses were renovated and a loyalty program was introduced, allowing golfers playing different Accordia courses throughout Japan to rack up points for discounts on greens fees. So far, 600,000 cards have been issued for the program and golf has increasingly been promoted as a game for younger people and women – not just chief executive officers.
“We are pushing the idea of it being a new game,” Tokyo-based Goldman Sachs spokesman Orlando Camargo told the Wall Street Journal last year. “We now have more people playing more rounds than we did before.”
Goldman is involved with other real estate assets in Japan, including hotels and natural spring bath facilities. A source close to the firm explains the thinking behind the distressed deals: “Behind every non-performing loan, there is an underperforming asset waiting to be productive again.”
Private equity firm Lone Star is reportedly looking to list its Pacific Golf Management on the Tokyo Stock Exchange as early as this autumn, according to a report in a Japanese newspaper. Tokyo-based Pacific Golf was founded in 2001 and has about 95 courses in its portfolio.
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