Japan Investment Corp to Launch $5.4 Billion Buyout Fund

The state-backed Japan Investment Corp. will set up a $5.4 billion new buyout fund in the next couple of months for sweeping business overhauls as Japanese companies log a record pace of mergers and acquisitions.

The fund, to be established through subsidiary JIC Capital, is expected to focus on deals topping over $650 million with investment horizons of about 10 years, Japan’s biggest English financial daily Nikkei Asia reported.

JIC Capital will also partner with private equity funds and other investors as a minority shareholder in a bid to draw private capital. JIC, whose backers include the government and some of Japan’s biggest industrial groups, seeks to ensure domestic investors are involved in M&A deals that drive consolidation and boost the nation’s competitiveness.

JIC already manages a total of $7.43 billion in funds targeting midsize and large companies and has taken part in deals such as carveouts of noncore businesses. It has invested in chip materials maker JSR and auto parts supplier Astemo, among other deals.

Japan’s Ministry of Economy, Trade and Industry will seek funding to strengthen JIC in its fiscal 2026 budget request. The investment company, in addition to broadening its portfolio, will start providing support to private-sector funds, investing up to $33.78 million in funds that provide capital for deals worth over $670 million.

Japanese funds have invested mainly in small and midsize businesses facing succession and other challenges. JIC aims to foster players that can fund big restructuring deals.

With the US tariffs expected to weigh on Japan’s economy, the hope is that stronger policy financing will help bring fresh blood into Japanese industry and lift its growth potential.

M&A Deals in Japan

The report also said that M&A deals involving Japanese companies rose 17% last year to a record high of 4,700, with the total value growing 11% to $13.8 billion, according to data from Tokyo-based Recof, which has been engaged in domestic and cross-border M&A transactions for its clients’ strategic growth and is a pioneer of M&A boutique firm in Japan.

Recof also said that the number of M&A transactions by Japanese companies in the January-June period of 2025 was 2,509, an increase of 7.1% from 2,342 for the corresponding period in 2024. The value of M&A transactions in the January-June period of 2025 was $13.97 billion, up 108.1% from $6.9 billion in the same period last year.

Much of the funding for major deals came from the Japanese arms of global private equity groups such as KKR, Carlyle and Blackstone, Nikkei Asia report said.