Founded in 2023 and backed by major institutional investors, Japan Activation Capital partners with mid- to large-cap Japanese firms—bringing private equity-style value creation, strategic engagement and global ambition to listed companies.
Could you tell us about your career journey and what led you to support businesses the way you do today?
Of course. While you briefly mentioned my firm, let me provide a bit more background on my professional journey and why I am so focused on supporting businesses. I began my career at a traditional Japanese commercial bank—Sumitomo Bank (now Sumitomo Mitsui Banking Corporation). In Japan, it’s quite common for university graduates to begin their careers at commercial banks. This is quite different from the U.S., where those with financial aptitude often gravitate toward the equity side of the balance sheet, which offers higher risk but also greater return. In Japan, particularly at that time, joining a commercial bank was considered prestigious and a mark of stability.
Sumitomo Bank later sponsored my graduate studies in the U.K., where I obtained a master’s degree. After returning to Japan, I joined the bank’s M&A advisory division. Around that time, Sumitomo Bank had decided to support Daiwa Securities, which was in a precarious position following the 1998 crisis. They formed a joint venture to do this, and M&A division employees and I were seconded to that entity. In that role, I had the opportunity to work on strategic alliances with Lazard, a firm Sumitomo was closely affiliated with and often collaborated with on deals. After some time, I made the move to join Carlyle. Back then, private equity (PE) was still a new concept in Japan. Working in PE for the first time made me realize that being an investor requires not only dealmaking capabilities, but also the ability to manage an internal investment committee and organizational dynamics. I decided to return to investment banking to deepen my experience and joined Lazard, which was just strengthening their operations in Japan. They offered me the chance to work in the U.S., and since both investment banking and PE are rooted in the U.S., I saw this as an invaluable opportunity to strengthen my foundation.
About four years later, I felt confident enough to return to the principal investment side. Around 2006, global firms and some European funds were entering the Japanese market. At that time, PE in Japan was still poorly understood and I often found myself in discussions with global PE leaders about the need of a strong local presence. In 2006, I rejoined Carlyle and did lots of deals in industrial and retail sectors. In 2020, I was promoted to Deputy-Head of Japan and was managing all carve-out deals from Japanese mid-large public companies. Now, with Japan Activation Capital, I’ve launched a fund focused on Japanese public companies. Our value-creation model is—once we invest, we become insiders and partners—working closely with management teams, who actively seek our support. It’s a deep, collaborative, hands-on approach rather than a purely financial investment.
At Carlyle, you were taking 100% ownership. Now you’re investing about 5% to 10%. How do you expect to influence companies with such ownership?
That’s a question I often get from global LPs. They ask, “Now you’re taking minority stakes—how can you still change a company?” My response is that in Japan, even owning 100% does not guarantee transformation. Many companies still operate under a lifetime employment model, and replacing the CEO rarely leads to transformation. With mid-large, long-standing Japanese corporations, bringing in an outsider can even backfire—misalignment just shifts from the executive suite to the rest of the company.
Instead, the challenge is not competence but experience. Japanese employees are generally very capable, but many have spent their entire careers within a single division. They’re excellent at running routine operations but not at driving change or innovation. Japan’s economy is at a point where routine business models are no longer enough. Companies must evolve and upgrade from product sales to aftermarket services or pivot to digital and global markets. Yet employees who’ve been in the same role for decades often don’t know how to do new things—even if they understand what needs to be done.
Diversity usually refers to gender or nationality. In Japan, I believe experiential diversity—exposure to different roles, functions, and challenges—is even more critical. Our role is to help bridge that gap. We introduce new ways of thinking, encourage experimentation, and support early wins that build confidence. This often leads to behavioral change. That’s how transformation begins. Whether we own 5%, 10%, or more, we act as partners in change in the same boat with the management. But if we own 0%, then we’re just a consulting firm—and that’s not who we are.
Why shouldn’t these companies just hire consultants then?
That’s another question I hear often. But here’s the thing—most of these companies have already hired consultants. They just get a few hundreds of powerpoint pages with lots of theoretical strategy but not really focusing on how to execute them. When CEOs receive these reports, the first question they ask is: “How do I actually implement this?” We’re not just offering ideas—we’re committed capital partners and supporting actions. We stay involved and help implement the strategies ourselves. That’s the difference between a consultant and a true transformational partner. We roll up our sleeves and support the creation of real, lasting value.
Could you elaborate more on the kind of strategic support you offer beyond what consultants or traditional investors provide?
Through my career, I had chances to speak with many CEOs of large corporations, and they often said, “What I really want is help growing my core business. Only selling off subsidiaries or non-core business doesn’t change my company’s future profile.” That’s when I realized that real transformation means helping companies with both offense and defense—supporting cost-cutting or divestitures where necessary but also enabling growth in their core businesses. Japanese mid-large corporations face challenges in doing both simultaneously, and that’s where we step in.
In Japan, many smaller-cap public companies are going private because they no longer see the value in remaining listed. But for mid-large corporations, unless they have a dominant shareholder—such as a founder or a parent company with significant ownership—they typically won’t consider going private in Japan. So, instead of pushing them to go private, our approach is different: stay public, avoid typical leverage buyout debts, and allow us to support your transformation as a shareholder. That’s the foundation of our business model.
Did you officially launch Japan Activation Capital in 2023?
Yes. I officially resigned from Carlyle in September 2023 and by October 2023, I had officially launched Japan Activation Capital. We closed our first fund in April 2024—with approximately $1 billion (JPY 130 billion) in capital. We closed an additional approximately $500 million (JPY 77 billion) in March 2025, so we’ve raised a total of $1.5 billion so far. For a first-time fund, that’s quite significant, even by global standards. All of our investors are leading Japanese financial institutions and university endowment. They understand this is a new kind of PE-like approach for listed companies.
What makes your investment approach unique in the Japanese market?
Our role fills a critical gap. Traditional PE requires a company to go private, which isn’t feasible or desirable for many of Japan’s most prominent companies such as mid-large companies. Activist investors, on the other hand, typically focus on balance sheet optimization—pushing for dividends or asset sales—but rarely help transform the actual business. Our strategy is fundamentally different. We support both offense and defense of companies’ action. We help management reimagine their business model, expand internationally, improve organizational structure, and communicate more effectively with the capital markets.
Our investment area is what I call “white space”—companies that are too large or too public for PE, and too transformation-minded for activists. There was no solution for them before. Now there is. Based on my past experience, Japanese financial institutions recognize the importance of this function in Japan and trust JAC to support its development.
Japan Activation Capital HQ
You mentioned Omron as one of your portfolio companies. Could you walk us through that investment?
When we first invested, their stock was trading at a valuation of around 9x EBITDA—down from previous levels of 13-14x. Their main business—industrial automation—had relied on the Chinese market, which has since stabilized, impacting growth and margins. Despite the challenges, Omron has strong technology and excellent people. The CEO, who took office two years ago, is deeply committed to restoring the company’s former strength. He’s ambitious and proactive, but also realistic—he realized they needed support to accelerate change. That’s where we came in as a true partner.
Once the ownership was secured, we signed a partnership agreement and publicly announced it. You may have seen our co-branded press release and joint logo—both reflect the genuine partnership between us. We’re not passive investors; we’re here to support growth as a committed, active and constructive shareholder.
When evaluating companies, do you only invest in those you already have relationships with, or are you open to new names?
It’s a mix. We target companies where we can drive three types of transformation:
And yes, we are open to new relationships, as long as we believe we can add real value and the management team is willing to collaborate.
Japan is a shrinking market demographically. How important is global expansion for the companies you support?
It’s absolutely essential. All of our portfolio companies already have some level of presence overseas. We help the companies by strengthening their ability to manage global teams, implement consistent governance structures, and clearly define roles for local leadership abroad. Japanese companies often struggle with global M&A—not because of a lack of opportunity, but because of a lack of confidence in managing international operations. That’s something we help them develop. Once the corporate infrastructure is in place, they can consider inorganic growth more confidently.
You also mentioned digital transformation. How do you assess the digital readiness of Japanese companies, especially in traditional sectors?
Let me be clear—B2B companies transitioning from hardware to digital solutions is still a challenge globally, not just in Japan. There are few success stories of traditional manufacturers evolving into digital solution providers. Our view is that you must not abandon your core products. Instead, use digital tools to strengthen your offering—create stickier customer relationships, introduce value-added services, and build ecosystems that customers don’t want to leave. But to get there, companies need to define clearly why they’re pursuing digital transformation. It’s not about launching an app—it’s about enabling long-term business sustainability and customer retention in a more competitive and connected world.
You’ve said that company transformation is not just strategic—it’s cultural. How do you ensure that your strategies actually translate into on-the-ground change inside the company?
That’s a critical point. We usually don’t engage directly with lots of employees until after the investment. That’s why selecting the right CEO and senior management members is everything. Some executives talk about change but lack real conviction. Over 20 years of investment experience has given me a sense of who truly wants to transform and who’s just saying the right things.
We only invest in companies where the CEO has already taken the first step—maybe they’ve tried to drive change and recognized they need strong support. We don’t have governance power to change management; we enable them. If a CEO isn’t ready to change urgently, it’s simply not the right fit for us.
Japan National Stadium Tokyo
How do you view your role compared to activist investors?
Activist investors still have a role to play in Japan. There are many companies where the CEO is simply not taking action—what I call “sleeping on the road.” Those are valid targets for activists, who are good at waking them up. But in our case, the companies we invest in already want to change and upgrade the business and market capitalization—they’re just not 100% sure how to execute that change with speed.
If activists pressure a company that’s already trying to transform, it often ends up being counterproductive. Activists typically expect quick returns, while the company is focused on deeper, longer-term operational shifts. That mismatch creates unnecessary friction. We take a different approach. We enter only after extensive discussions with management. We never show up and say, “We’re shareholders—now listen to us.” Our investments happen only once both sides agree on a shared value JAC will be providing. It’s a partnership from the start.
You mentioned earlier your goal of doubling stock prices over three to four years. Could you elaborate on that target and how it translates into fund performance?
Yes. We target an investment period of about three to four years, similar to traditional PE. Our goal is to double the equity value during that time, with half of the value creation coming from improved performance (P&L) and the other half from multiple expansion driven by a stronger future growth outlook. Many Japanese mid-large public companies’ valuation multiples have stayed at a similar level for the last 5 years, although Nikkei Index has significantly gone up. This is driven by super large cap companies and semiconductor-related companies.
People often ask how we can generate PE–level returns without using leverage. There are three main reasons:
So, while we don’t use financial leverage, we leverage our ability to transform businesses and align closely with management—delivering returns comparable to, or even exceeding PE benchmarks.
As Japan sees increasing interest from global investors, what role do you see Japan Activation Capital playing on the world stage?
Global investors are certainly showing more interest in Japan. That said, many are coming here as a last resort, not because they fully believe in Japan’s fundamentals, but because other markets—like China—are less investable right now. Some ask me for my view on the Nikkei Index. My honest view is that the upside is limited. Japan’s structural challenges—aging demographics, low productivity growth—aren’t going away. So, I don’t think the index itself will deliver sustained alpha.
But individual companies? That’s a very different story. There are many companies with excellent technology, strong talent, and untapped potential that have simply not executed well. Their multiples are depressed, but they can absolutely be transformed. I focus on what I call Japan’s “second-tier large corporations”—companies with market caps between $1.3 billion and $13 billion. These are often overlooked by global investors, but they hold significant value. When you compare them to global peers, the valuation gap can be 30–40%, sometimes more. And the quality is there—the challenge is execution speed. That’s where we come in. By helping these companies close that gap, we’re not only creating value for our investors—we’re helping reshape how the world views Japanese corporations.
What sectors do you think hold the most promise for this type of transformation?
We’re targeting several key areas including:
These sectors tend to already have some global presence and intellectual property advantages, but they’re often under-leveraged in terms of strategic execution. There’s also room for growth in digitalization and global M&A.
On the other hand, some sectors—like traditional automotive parts or basic chemicals are more structurally challenged. In those cases, even if you have very strong CEO, it’s difficult to generate alpha. We’re not magicians who can change an entire industry’s underlying dynamics. So, we avoid situations where structural headwinds outweigh management quality.
Let’s talk about the future. You launched JAC in the fall of 2023. Looking ahead to your 10-year anniversary, what would you like to say about the firm’s evolution?
That’s a great question. In 10 years, I hope Japan Activation Capital will be seen as more than just a fund—we want to be a catalyst. First, I want our reputation to be strong enough that when JAC invests in a company, others take notice. When Warren Buffett invested in Japanese trading houses, everyone paid attention – I’d like our involvement to have a similar signaling effect. Second, over the longer term, I want JAC to help modernize not just individual companies, but Japan’s broader investment culture and environment including the investment behavior of Japanese pensions and endowments who are traditionally conservative in asset allocation.
Finally—for the 1.2 million global readers of Bloomberg Businessweek, many of whom are investors, executives, and decision-makers—how would you summarize Japan Activation Capital in one clear sentence?
We are a firm that unlocks the full potential of Japanese companies—leveraging their legacy strengths while transforming how they operate, grow, and communicate with the world. Put simply, we help them use what already makes them great to build what comes next—transforming great histories into even greater futures.
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