UNIT Japan's economy is still struggling to get out of its decade-long slump, but venture capitalists are already seeing the light at the end of the tunnel toward a sort of new economy. Japanese banks, markedly reinvigorated by rigorous resuscitation campaigns of the past few years, are keen to get into the venture-capital funding business. As a venture-capital investment vehicle, MBOs will help transform Japan Inc that has traditionally been supported by keiretsu business groupings and their bank sponsors. Keiretsu ties are already breaking up as cross share- holdings are unwound. Furthermore, changes in Japanese commercial law and accounting rules have made it easier for companies to spin off and sell their businesses.
Investment banks are also active players in the Japanese venture-capital market.
Last November Nikko Securities and Trans Cosmos formed a joint investment company, eVentures, to set up a Y10bn venture fund to invest in Internet-related companies. US investment bank JP Morgan now plans to invest up to Y10bn in unlisted start-up companies in Japan this year. The move followed January's announcement by the US investment bank Goldman Sachs and Japanese computer parts maker Kyocera that they were setting up a Y30bn fund to invest in small but promising high-technology firms. In a more ambitious bid, Softbank Finance, a subsidiary of Softbank, is setting up a Y150bn venture-capital fund with institutional investors by the end of March. Last July, Softbank formed a Y12.3bn fund for investing in about 80 Japanese Internet-related companies.