Goldman to exit $446m Japan golf investment

Goldman Sachs is to exit its investment in Accordia Golf Company, the Japanese golf course operator in which it holds a 44.7 percent stake currently valued at $446 million.

Tokyo-listed Accordia said in a stock exchange announcement today that Goldman Sachs, the company’s largest individual shareholder, had decided to sell its position via a secondary public offer of its 470,587 shares. Goldman Sachs and Daiwa Securities Capital Markets are to market the stock. The bank was holding the investment on its balance sheet and was managing it through its Merchant Banking division.

Accordia Golf, established in 1981, currently employs more than 6,000 staff working across 131 courses and 16 driving ranges countrywide.

Golfing and investing

In its announcement, Accordia said: “The company had entered into a business alliance agreement regarding investment in golf courses and golf related facilities with Goldman Sachs Japan, another subsidiary of Goldman Sachs, but the company’s board of directors resolved at its meeting held today to cancel such business alliance.”

The Wall Street titan purchased the company in 2001. The firm sought then to capitalise on the inability of many golf course operators to meet their debt obligations. Dallas-based Lone Star Funds was also an active private equity real estate investor in the Japanese golfing market forming Pacific Golf Group International.

Through its distressed investments platform Special Situations Group, Goldman formed a business called South Wind which would go on to turnaround the fortunes of one such ailing business called Nitto Kogyo, for example. South Wind was later rebranded Accordia Golf Company although the Cayman holding company of the shares has retained the South Wind name. The portfolio was refinanced in 2005 when Accordia was taken public. At initial public offering Goldman Sachs sold 52.9 percent of the shares, generating an IRR of 52 percent.