Success Stories

MGP provides start-ups with the option to raise sizable capital not only through IPOs, but also through private capital raising which allows them to aggressively invest capital and to manage resources for the growth of their businesses. By doing so, we believe that Japanese start-ups will continue to invest boldly based on a long-term strategic vision, rather than simply focusing on short-term profit, and that this will lead in to greater competitive advantages and vitality across these industries in Japan.

MGP can invest from pre-IPO and continue to hold in post-IPO stages, which means investing across the company's entire lifecycle. Pleiad can also invest at and post IPO and build large positions in the public markets in the longer term. MGP and Pleiad together intends to establish a private-to-public crossover investment style.

Our sole shareholder, Pleiad, is a Hong Kong based independent investment management company which manages absolute-return oriented equity investment strategies focused on the Asia-Pacific region. Their main investment target is public equities, including Japanese public equities. However, they did not initially have any intension to establish a Japan entity, since Japanese listed companies' research is largely based on public information which are available online.

However, Pleiad subsequently saw opportunities to invest in private Japanese companies, and started to consider developing a new business in Japan. At this opportune timing, Pleiad met Nagasawa and Murashima, who all had the same ideas about the Japanese private equity market, and decided to start a new business together in Japan. The parties initially started its Japan business by launching a fund as a notifier of Specially Permitted Businesses for Qualified Institutional Investors, etc. under Article 63 of the Financial Instruments and Exchange Act. However, as the number of staffs in Japan has increased, and in order to build a sustainable business based in Japan, we came to the decision that we should establish and register as an Investment Advisory and Agency Business Operator.

Our law firm informed us that there is an option to go through the IAA registration all in English. Taniguchi of Pleiad is Japanese, but the other staff cannot read or write Japanese, so we thought that English registration could shorten the registration process by eliminating the burden of translation work. It could be possible for Taniguchi to do the documents in Japanese with the lawyer's support, but since various non-Japanese employees were involved, it was very advantageous that all communication with the regulator could be done in English.

We did not have any particular concerns about registering in English since our lawyer informed us that the Financial Market Entry Office will support us throughout the registration process. After actually experiencing the process, we felt that the support by the Office was more substantial than expected. We are satisfied with the English registration process because it was carried out smoothly and the registration was completed earlier than we had expected.

Since our company has Japanese staffs, we did not need language support through this program. But I think that for most foreign asset managers who don't speak Japanese or are unfamiliar with Japanese business practices, support from such a Program through Tricor Japan is very useful. It is good to know that now there are such outsourcing companies in Japan that we can rely on when we need advice.

Overall, we think that the establishment of Financial Market Entry Office, one-stop all-in-English office for foreign asset managers' considering new business in Japan, is really a big step.

Pleiad and MGP have been connected by fate.
After graduating from University, Nagasawa and Murashima were colleagues at Mitsubishi Corporation. They have experienced a few career changes including investment banks, and they worked in the U.S. west coast offices of Goldman Sachs and Morgan Stanley, respectively, in 2010. Silicon Valley was at the height of the IPO boom, but soon we saw an acceleration by U.S. mutual funds and pension funds investing in the pre-IPO stage, which is shortly before going public.

After a while, Nagasawa, who became Mercari's CFO, and Murashima, as a banker, worked together on Mercari's pre-IPO financing and global IPO. This led the two to start discussing what they should do to attract more foreign institutional investors to Japanese start-ups' private equity investments. What they were aiming was a unique "crossover investment", to invest in start-ups before and after IPO. They thought they would need 1) a dedicated private equity team that could invest from private equity to public assets, and also 2) a good partnership with listed equity investors so that they could continue to invest in the company after IPO.

In the meantime, Pleiad became interested in expanding their business to the Japanese private equity market. So when Pleiad had the opportunity to meet Nagasawa and Murashima, it was natural for them to agree on their visions, and to start a partnership. During his investment banking career, Murashima had known Pleiad as a leading Institutional investor in Asia. Pleiad was a stockholder of Mercari. You could say that Mercari's global IPO and post-IPO IR activities tied us all together.

For Nagasawa and Murashima, in addition to create a “crossover investment” business scheme, this meet-up with Pleiad was also very attractive since this would enable them to use Pleiad's fund management function and infrastructure, rather than building them up from scratch.

Japanese private equity is attracting attention from overseas institutional investors as an asset class with high potential. We are beginning to see more institutional investors in later stage private equity (or pre-IPO) investment. If such cases increase, the bridge from private to public will become more smooth, and more institutional investors will consider investing in Japanese private equity.

In Japan, venture capitalists tend to invest at a very early stage of start-ups, and those start-ups choose to go public even when they are not ready because there are no other options for them to raise more money they need to expand their business. We think it would be great to have an eco-system in Japan where growth investors can engage from the pre-IPO stage and also continue to invest in the company after IPO. We aim to play this role by our crossover investment business scheme; MGP investing in private equity and Pleiad investing after IPO, and together creating a picture of start-ups' future visions instead of exiting from the investment at the timing of IPO. If we can make this happen, it will be encouraging for many startups, and we are very happy to play an important role of this investment flow.

So we hope that the legal system in Japan will further promote smooth flow of money to start-ups transitioning from private to public entities as well as smooth change of owners best suited to each stage of their growth, which would be welcomed from all start-ups.

Our first fund invests in companies in the later stage of private equity, or pre-IPO stage, which is quite easy to understand the investment opportunity, compared to investment for early stage PE's. This is the area we can directly leverage our experience and strengths.

We have not yet decided the policy for our following funds, but we also see exciting opportunities in post-IPO investment and/or private equity investment outside of Japan.

Pleiad was named after the Pleiades star cluster (Pleiades: the word originated from the seven daughters of Atlas in Greek mythology). We chose this name as we wanted to shine brightly as a team, in contrast to many other funds often founded and operated by one star player.

Minerva was named from the goddess of Roman mythology (the god of art, music, medical and education). This matched our company vision that we want to “partner” through, starting from art (qualitative elements such as vision in the early stage) then leading them to the right direction by science (quantitative elements such as execution of strategy in the “growth” stage and determination of investment results).

Both Pleiad and Minerva are derived from mythology, and we think they are a good combination.