Realize Potential Values of SMEs Through Private Equity Investments

We have realized that Japan experienced the crush of its bubble economy which started in the early 90’s and that it has yet to overcome a low-growth era after going through a high-growth period and becoming the world’s second-largest economy.  Such Japanese industries as automobile, consumer/industrial electronics and semiconductor, which led Japan’s economic growth are now facing intense competition globally and the industrial structure of “Corporate Japan” has changed drastically.  Due to low productivity and lack of innovation, Japan has been struggling to create values which it once achieved in the past.  In addition, succession planning of many companies has become one of the serious issues for the country on the back of declining birth rate and a growing population of elderly people.

 

We have established Value Quest Partners as a way to help Japan overcoming the structural issues through value creation in order to achieve a better society.  Small and medium-sized enterprises in Japan (SMEs) create two-thirds of domestic added-value and approximately 70% of jobs.  Hence, we believe it is crucial to improve the values of those SMEs to improve productivity of Japanese economy overall.

 

Value Quest Partners takes Analyst’s Approach as a very new approach in the private equity market.  Analyst’s Approach is to explore values of SMEs just like analysts quest for potential values of listed companies through dialogues with the management teams.  We believe taking the Analyst’s Approach enables us to create value of SMEs in the same way.  Not only identifying the potential values which even the management teams are not aware of, we but also work along with the management/employees to realize the values; after discussing the management direction, shaping agenda and prioritize them with the management team, we continue the dialogues and raise adequate questions to the team to realize the management’s target.  We also support the management on hiring necessary staff for execution of the management plan using our network.

 

Value Quest Partners’ team consists of an experienced buyout fund manager with sell-side analyst background who supported succession of long-lasting Japanese SMEs, members who have actually observed the transition of various industries and companies in Japan since 1980s as insiders (analyst/corporate executive/CFO) and a current CEO of a Japanese regional small company.  We are confident that Value Quest Partners is able to provide unique values to Japanese SMEs by spotting the “pressure points of improving enterprise value” which each of the members with diverse background have developed through the past work experiences.  We utilize our knowledge that we have gained through dialogues with various companies to pursue our value-creation model which helps SMEs to continue its business long-term while incorporating the perspectives of all stakeholders.