About Polaris About

Investment Policies

• Main concept: Revival of “Founder’s Spirit” and promotion of “Business Model Innovation” to help revitalize the Japanese economy
• Target companies: Buyouts of Japanese companies with a solid business franchise and stable earnings base, with potential for global expansion and operational enhancement such as further revenue growth, margin improvement and DX
  • Technology and Manufacturing companies with globally competitive technologies/patents
  • Medical, Healthcare and Welfare businesses with ESG angles, such as measures for social welfare and ageing population, and that are expected to grow in the future
  • IT, Services and Logistics companies that creates new value and has growth potential for the future
  • Consumer Goods and Retail businesses that have established strong brands and unique business models in Japan and have potential for global expansion
• Excluded types/sectors: real estate, financial services, distressed assets, early-stage venture/start-ups and PIPEs

Deal Pattern

• Acquisition of the original owner’s shares for business succession
• Take privates of listed companies to realign ownership structure and restructure business strategy
• Carve-outs/spin-offs of non-core businesses/subsidiaries of large conglomerates
• Other deal types including acquisition of shares from financial investors, including other PE funds

Ownership Percentage

• Securing majority of voting rights (preferably >2/3 ownership) is a must
• Minority investment (c.1/3 ownership) only considered if control over governance/ exit strategies secured

Target Sectors

• Diversify the portfolio into the 4 categories below:
  • Category I ： Technology and Manufacturing
  • Category Ⅱ ： Medical, Healthcare and Welfare
  • Category Ⅲ ： IT, Services and Logistics
  • Category Ⅳ ： Consumer Goods and Retail

Size of Target Company

• A corporation or a business division with Enterprise Value of JPY10 billion to JPY100 billion.

Size of Equity Investment

• Number of investments: Over 10 investments for portfolio diversification
• Equity amount per investment: minimum JPY 5 billion, target JPY 10 – 30 billion, maximum 15-20% of total commitment amount of the fund
• Co-investment with LPs as well as strategic and/or financial investors for large deals

Post-Investment Monitoring

• Hands-on involvement in monitoring and value creation efforts to maximize the value of the portfolio companies.
  • Send in outside directors to work with the existing management of the portfolio company, in order to implement stronger corporate governance and more effective business strategies
  • Dispatch investment officer on a full-time basis for the “First 100 days” to jump start the value creation process if required
    (depending upon the portfolio company’s situation)
  • In principle, members of the Operations group are involved in new investment projects from the business due diligence stage, and work with the investment group (and IR group) to monitor the projects as one team. On the other hand, the group also acts as a check and balance on the investment group.

Exit Strategy

• Exit within 4 to 5 years via trade sale to strategic/financial buyers or IPO