2005 Reports

The role of private equity in Japanese industrial restructuring: The case of Daiei

As Japan finally embraces corporate reform, the buyout industry has begun to make its mark. There have been several high profile cases over the past few years, but one transaction has been particularly notable: the restructuring of retailing giant Daiei by Advantage Partners, LLP, Marubeni Corporation, and the Industrial Revitalization Corporation of Japan (IRCJ). Daiei's restructuring is a unique example of how a private equity firm and a government organization are working together to implement a plan to restructure a large Japanese corporation. It is a test case that many observers are watching closely to see how private equity firms may contribute to the restructuring of corporate Japan. To explore the role of private equity in Japanese restructuring, the Program on Alternative Investments organized a symposium and invited two leading experts on Daiei's ongoing reforms. The first speaker was Mr. Atsushi Saito, President and CEO of the IRCJ, a Japanese government-backed agency staffed with executives drawn from both the public and private sectors to restructure ailing Japanese companies. The second speaker was Mr. Taisuke Sasanuma, Representative Partner of Advantage Partners, one of Japan's leading buyout firms and the company principally in charge of restructuring Daiei. Following these presentations, Professor Hugh Patrick, Director of the Center on Japanese Economy and Business, offered comments and questions in his role as discussant. The symposium was held on November 15, 2005, on the Columbia campus, and was moderated by Dr. Mark Mason, Director of the Program on Alternative Investments.