US pension fund commits $100m to Polaris Capital’s new $1.4b PE fund

Mount Fuji and buildings are reflected on a table at an observation deck in Tokyo, Japan. Photographer: Kiyoshi Ota

Pennsylvania Public School Employees’ Retirement System (PSERS) has made a commitment of 10.6 billion yen ($100 million) to a fund managed by Japanese private equity firm Polaris Capital Group, according to a resolution passed by the US pension fund’s board.

The commitment is for Polaris Fund V, the Japanese PE firm’s latest fund that seeks to invest in the small- and mid-cap segment in Japan, with a particular focus on corporate carve-outs and business succession transactions.

This would be PSERS first investment with Polaris.

The fund, which has a target size of 150 billion yen ($1.42 billion), will follow the same investment strategy and focus that Polaris Capital has deployed since 2004, PSERS said.

Polaris Capital, founded in 2004 through a joint venture between Mizuho and Asset Management One, closed its first fund with committed capital of just under 30 billion yen ($282 million) in November 2004.

While the business succession and carve-out transactions formed the backbone of the investment strategy, Polaris also invested in other strategies. These included secondary buyouts, take privates, as well as venture and turnaround transactions.

Last February, DealStreetAsia reported that Polaris made a tender offer to privatise the country’s pharmacy chain operator Sogo Medical Holdings that could value the Tokyo-listed company at about JPY76.5 billion ($696 million).

The new fund will mainly target investments in Japanese companies or business divisions with enterprise values between $100 million to $700 million and which have the potential to expand into the Asian markets.

Aside from its commitment to the fund managed by Polaris, PSERS also committed $100 million to venture capital fund Greenoaks Capital Opportunities Fund III and another $169 million to Insight Partners Opportunities Fund I, a growth fund that targets investment opportunities in the software sector.

The $57.2-billion pension fund has been actively investing in Asia-focused funds. Last year, it committed up to $150 million to funds managed by South Korean private equity firm Hahn & Co. Historically, PSERS has invested in Asia-focused private equity funds such as Bain Capital Asia Fund II and III, Actis Emerging Markets 3, Baring Asia PE III to VI, CVC Capital Partners Asia Pacific and Navis Capital Partners.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.