Page 129 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes Due to the pressure for banks to dispose of non-performing loans, it is expected that
turnaround deals will increase dramatically over years to come. Consequently, the
number of corporate turnaround funds has increased sharply and is expected to increase
even further. For buyout firms, corporate turnarounds provide an important source of
investment opportunities. Accordingly, most buyout firms have been expanding their
activities into corporate turnarounds.

There are several types of buyout firms in Japan (Figure 2 below):
l Venture capital-affiliated buyout firms (e.g., JAFCO’s Structured Investment
Group);
l Domestic independent buyout firms (e.g., Advantage Partners, Unison Capital, MKS
Partners);
l Foreign independent buyout firms (e.g., Ripplewood Holdings, Carlyle Japan
Partners);
l domestic principal investment firms (e.g., Nomura Principal Finance, Daiwa
Securities SMBC Principal Investments, Mizuho Capital, Tokyo Marine Capital);
and
l Foreign principal investment firms (e.g., Goldman Sachs, BNP Paribas, J.P. Morgan
Partners).

figure 2: Buyout firms in Japan
Questions
1. Discuss the case in brief.
2. Explain the types of buyouts firms in Japan.

Source: http://www.abeam.com/research_reports/eng/RR057_E(Corporate%20Restructuring).pdf

6.3 summary

l z In external reconstruction a new company is formed for the purpose of taking over the
business of an existing sick company which has incurred huge losses and is facing financial
difficulties.
l z Existing company is wound up by selling its business to the newly formed company which
is generally similarly named and owned by the same shareholders to a great extent.

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