Unison to invest ¥2.5bn in real estate finance

Tokyo-based buyout firm Unison Capital will invest ¥2.5 billion (€20.6 million; $28 million) in Tokyo Stock Exchange-listed MK Capital Management, a finance and real estate capital management company.

Unison will acquire 96,154 shares of common stock through an allocation of newly-issued shares in the company and will own 61.3 percent of the company’s issued stock following the completion of the deal, Unison said in a statement.

Founded in 2001, MK Capital is engaged in real estate asset management, asset incubation and other related businesses. The company provides real estate purchase proposals and is involved in the operation and management of real estate through special purpose vehicles. It also provides business support loans, financial advisory services and real estate brokerage services.

The investment in MK Capital will be used to strengthen the company’s management base and for enhancing business and shareholder value. MK Capital shares opened at ¥25,800 on Monday and were trading at ¥30,000 at press time.

Unison found itself in the midst of a scandal late last year when Kenichi Kiso, a partner at the firm, died in undisclosed circumstances a day after the Japanese Securities and Exchange Surveillance Commission entered its offices to investigate an alleged charge of insider trading.

In February 2010, Unison implemented new measures including a ban on Japanese equities trading and revised information security policies to strengthen its internal control systems.

Though the SESC investigation was subsequently dropped due to Kiso’s death, an external third-party investigation committee appointed by Unison itself concluded in December that Kiso had traded securities listed on the firm’s restricted securities list from July 2002, when he joined the firm, up to the time the SESC investigation began.

Unison closed its third fund on ¥140 billion in August 2009, making it one of the largest funds raised in Asia in 2009. The firm was initially targeting commitments of ¥200 billion, but subsequently lowered its target to about ¥150 billion towards the end of 2008 in light of tough market conditions, a source told PERE‘s sister publication, PEI Asia, at the time of the fund’s close.

The firm seeks investment opportunities in management buyouts, spin-offs of business units by large corporations, ownership succession transactions and other buyout investments that can help companies grow.

Established in 1998, Unison currently manages three private equity funds. It raised ¥38 billion for its first fund in 1999 and in 2004 it raised ¥135 billion for its second fund, including capital for co-investments. Thus far, the firm has invested in 14 companies with a total enterprise value of ¥700 billion.