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Fosun closes buyout of IDERA

The Chinese conglomerate has made its first investment in the Japanese property market with the purchase of the Mikihisa Hirai-led management platform.

Fosun Capital, the asset management arm of Hong Kong-listed conglomerate Fosun Group, has closed its maiden deal in the Japanese property market with the acquisition of boutique domestic property investment firm IDERA Capital Management, PERE can confirm.

Financial details of the deal were not disclosed, but it is understood that the purchase price was small enough that Fosun does not need to disclose it on the Hong Kong stock exchange.

The seller was Tokyo-based private equity firm Unison Capital, which bought a majority stake in IDERA in 2010 and closed a follow-on investment in 2011. With Fosun’s capital injection, China’s largest privately-owned conglomerate has taken a 98 percent stake in the IDERA platform, with the remaining 2 percent held by boss Mikihisa Hirai and the firm’s management team. Fosun has also been granted four of the six seats on IDERA’s board.

Neither party would comment on the details of the sale, but an announcement of the deal is expected in the next few days.
It is understood that IDERA’s change in ownership should have no impact on the firm’s existing investment strategies – it currently manages ¥200 billion (€1.4 billion; $1.9 billion) of assets – but the firm is expected to further expand its capabilities. IDERA will not only provide co-investment opportunities for Fosun alongside its existing investors, but is also expected to source and manage Fosun’s direct investments in Japan.

The scale of Fosun’s direct investments is also expected to prevent conflicts of interest in IDERA’s strategies. Although both Fosun and IDERA’s funds management business are seeking core-plus returns, IDERA’s funds and separate accounts have averaged $60 million of equity or less, while Fosun’s direct investments are expected to be more than $200 million each at least.

Over the long-term, Fosun is also understood to be planning to bring other investors from China into the Japanese property market. For now, however, it is expected to focus on its own investments, beginning with commitments to the country’s large cities such as Tokyo.