GIC marks 30 years in Japan with pledge to boost partnerships

GIC recently celebrated the 30th anniversary of its Japan office with the commitment to strengthen partnerships in areas such as specialised manufacturing, technology, infrastructure and real estate.

Its chief executive officer Lim Chow Kiat said: "GIC established our on-the-ground presence much earlier than other foreign investors. That has equipped GIC with valuable market knowledge as well as long-term relationships with policymakers, investee companies, fund managers and banking institutions in Japan. These have helped GIC to navigate the Japanese market over the last 30 years".

Even before the opening of its Tokyo office in 1988, GIC had been investing in Japanese equities and bonds since 1981. This later expanded into real estate and private equity in the 1990s, and more recently into infrastructure.

GIC is positive on Japan. Mr Lim said: "We view Japan favourably. Besides being a large and modern economy, Japan has many enterprises which are leaders in various industries, particularly specialised sectors such as precision engineering, chemicals, electronics and robotics."

He added: "We are seeing more investment opportunities and are engaging with partners on solutions where our capital can be helpful to enhance the value of their businesses."

GIC told The Straits Times that its investments in Japan span all asset classes and involve teams based not only in Japan, but also in Singapore.

Currently there are 10 investment professionals based in Tokyo, and another 25 in Singapore covering Japan in functions including investments, asset management and research.

GIC added: "We actively share our views as a long-term investor with Japanese partners. One example is GIC CEO's membership on Mizuho Financial Group's Global Council, which gives GIC a valuable opportunity to exchange ideas with senior Japanese and global business leaders."

GIC's investments in Japan also include property holdings. It recently acquired a 43 per cent stake in Shinjuku Maynds Tower, a Grade-A office building, from Daiwa Office Investment Corporation.
GIC's investments in Japan also include property holdings. It recently acquired a 43 per cent stake in Shinjuku Maynds Tower, a Grade-A office building, from Daiwa Office Investment Corporation. PHOTO: GIC

In the public markets space, GIC has been managing a concentrated portfolio of 20 to 25 companies in Japan as it has become more active in engaging its investee companies. Some of its major holdings include Shin-Etsu Chemical, Seven & i, Renesas Electronics and Fanuc.

In private equity, GIC said it has worked with regional managers active in Japan such as Carlyle Japan, KKR and Japan Industrial Partners. Besides investing in their funds, GIC has co-invested in several deals with the fund managers.

Last October marked GIC's first infrastructure investment in Japan when it took a stake in Japan Renewable Energy, a leading diversified independent power producer in the renewable energy sector.

GIC said: "We see attractive long-term growth potential in this sector, given the government's supportive stance towards renewables as energy security, environmental protection and lower energy costs are key priorities for them."

GIC's investments in Japan also include property holdings.

One of the most well known is the Shiodome City Centre. In 1997, GIC made its first direct large-scale investment in Japan when it entered into a joint venture with Mitsui Fudosan to bid for and develop a piece of land that was put up for sale by Japanese National Railways Settlement Corporation as part of a larger redevelopment plan for the area. GIC co-invested with Sumitomo Corporation in five assets, of which the largest is Terrace Mall Shonan, a mall in Tsujido, Greater Tokyo.

GIC contributed its in-house expertise on retail asset management and project development, and was heavily involved in the tenant mix, layout and construction planning of the mall. Terrace Mall Shonan has won many awards. It also acquired a 43 per cent stake in Shinjuku Maynds Tower, a Grade-A office building, from Daiwa Office Investment Corporation.

One unusual property investment is the Fukuoka Hawks Town, which comprises a baseball stadium, mall and hotel. The baseball stadium, which is the home ground of the very successful SoftBank Hawks, was renamed Fukuoka Yahuoku! Dome after GIC sold it to SoftBank. The hotel was rebranded to Hilton and is doing well with the rise in inbound tourism.

A version of this article appeared in the print edition of The Straits Times on March 05, 2018, with the headline 'GIC marks 30 years in Japan with pledge to boost partnerships'. Print Edition | Subscribe