LA JOLLA, Calif. – Investment adviser Pacific Corporate Group is advising Japanese giant Mitsubishi Corp. on a new $50 million private equity fund-of-funds that will invest globally.
The fund will be marketed through Mitsubishi’s new securities subsidiary of its merchant banking division, which is to begin operations April 1, said Kelly DePonte, chief operating officer at PCG. Mitsubishi plans to operate a series of private equity funds, he added.
The fund likely will seek commitments from Japanese insurance companies and university endowments. Mr. DePonte said private equity investing in Japan will begin to gather momentum because institutional investors may now pursue a more diversified strategy under the country’s “Big Bang” deregulation policy. Until recently, pension plans in Japan were restricted from investing in any kind of equity, but particularly international equity, he said.
The fund may invest in any market other than Japan, but PCG will recommend that the fund invest the majority of its capital in North America and Western Europe because the firm believes those to be the most attractive opportunities, Mr. DePonte said.
Mr. DePonte said Mitsubishi executives approached PCG in December 1997 with the idea of working on the funds.
PCG is planning to launch its own third private equity fund-of-funds this quarter, with a target of $125 million.
PCG recently has seen some personnel shifts, including the addition of a chairman and a vice president and the loss of two managing directors who went on to found buyout firm Kinsman Capital (VCJ, December 1998, page 6). -D.S., A.P.