KKR Weighs Entering Private Credit in Japan to Challenge Banks

Share

Share

(Bloomberg) — KKR & Co. is considering entering the private credit market in Japan to provide an alternative to bank loans.

“It will be a medium to long-term initiative,” Hiro Hirano, the head of KKR Japan said in an interview. “I think it is very important in Japan that we do it ourselves.”

The $1.7 trillion private-credit industry has swelled in the US and Europe by focusing on companies with high credit risk and private equity funds that need help financing acquisitions. In Japan, most direct lending has been done overseas and the domestic loan market is dominated by major banks.

In addition to private credit, Japan is the destination for about 40% of KKR’s investment in Asia. The firm sees Japanese companies increasingly willing to sell non-core businesses that can do better as individual entities. These so-called carve-outs often provide returns that are higher than other investments.

“An overwhelming number of Japanese companies and businesses have the potential to grow, but are not performing well enough,” he said.

The firm also plans to increase its offerings for institutional investors and high net-worth individuals in Japan. KKR is in discussions with domestic securities companies to offer products for individual investors. It already has a joint venture asset management company with SBI Holdings Inc. For institutional investors, KKR will offer wider access to its funds.

Separately, the 2022 restructuring of Marelli Holdings Co., a Japanese auto-parts supplier owned by KKR cost the firm the $2 billion it invested in the company. Banks which had lent to Marelli lost a total of 450 billion yen.

KKR has put in another $650 million to fund Marelli’s restructuring and the firm is now profitable, according to Hirano.

Share

Latest

Related Content

Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

Media Kit

    Data Protection

    The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

    The Digital Banker Summit

    Moving on from FTX: is 2023 the year of CBDCs?

    Indonesia, Jakarta

    Thailand, Bangkok

    Philippines, Manila

    Contact Us

      Data Protection

      The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

      Request Nomination Pack

      Error: Contact form not found.

      The world’s preeminent Private Banks and Wealth Managers are demonstrating a committed drive in innovation, advisory, new products and services to meet the sophisticated needs of their clients.

      COVID-19
      Amid economic activity revival on the back of the Covid-19 vaccine program, organisations moving from business continuity plans to stable working environments, together with the slightest improvement in unemployment numbers, forced the world to adjust to new realities. Coming to terms with the “new normal”, global investors are now on the look-out for attractive and stable investment opportunities.

      Needs of Private Wealth customers and families worldwide have drastically changed due to the pandemic and banks have had to accelerate efforts to deploy a multi-channel service strategy and safeguard clients’ businesses and wealth against negative impacts of economic uncertainly.

      The Global Private Banking Innovation Awards will recognise the world’s best private banks, wealth managers and asset managers that are championing innovation across advisory, service, products, customer experience and more.

      Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

      Request Nomination Pack

      Error: Contact form not found.