Bain Capital, the Massachusetts-based investment company, is looking to accelerate investments in the life sciences and real estate sectors in Japan this year, Masa Suekane, Partner, Bain Capital told Mergermarket.

While continuing to explore opportunities through its cross-sector approach, Bain Capital is trying to expand the range of its investment options in the said sectors by utilizing the expertise of its specialist teams and leveraging its global expertise and capabilities in these areas, Suekane noted during an exclusive interview with this news service.

For life sciences, Bain Capital is aiming to deep-dive into the core pharmaceutical space, according to Suekane.

The firm has a life sciences team that consists of approximately 30 specialists, including physicians and biopharma experts in Boston. This team can make investment decisions from specialist perspectives such as, for instance, estimating the likelihood of a drug’s approval based on academic papers and forming an optimal biopharmaceutical portfolio, he noted.

When investing in pharmaceutical companies, most private equity firms tend to invest in companies that already have drugs on the market and generate cashflow. Bain Capital’s life sciences team, however, can invest in those with a pipeline of drug candidates in the pre-regulatory approval phase and have not yet generated cashflow, Suekane noted.

“Leveraging this unique set of capabilities, we are aiming to expand our scope of investments into the core of pharmaceuticals that include drug discovery, not only investing in medtech companies in which we have track record through our investment in Evident,” Suekane said. Evident is a Nagano-based scientific solutions company that Bain acquired in 2023.

Real estate is also high on the firm’s agenda for this year.

“A lot of Japanese companies hold real estate assets on their balance sheets, and the number of such companies, proportionally speaking, is significantly higher in Japan compared to the US,” Suekane pointed out.

Bain Capital has extensive experience investing in Japanese companies with hard assets, including Showa Aircraft Industry (bought in 2020) and Ooedo Onsen (bought in 2015), he noted. “We are coming to the table with significant private equity and real estate experience, and this helps us pitch better proposals to companies,” Suekane noted, adding that Bain Capital has real estate, special situations, and private equity funds to draw from depending on the situation.

Stance on unsolicited offers

When asked about Bain Capital’s stance on unsolicited offers, and whether the firm could consider making such unsolicited offers to other Japanese companies going forward – following Fuji Soft [TYO:9749] for which Bain Capital is making an offer without the consent of the target’s board – Suekane said Bain Capital will not make unsolicited offers on general principle, and that the Fuji Soft situation is an exceptional case.

According to Bain Capital’s press releases from last year, the firm had initially set Fuji Soft management’s support for the tender offer as a precondition to carrying out the tender offer. The firm later decided to waive this prerequisite, stating that Bain Capital and the founding family had significant concern and distrust regarding several aspects of the process of selecting members for the special committee, the process of choosing a privatization partner, and the special committee’s response to Bain Capital’s proposals.

After stating this as a general principle and not in regard to the ongoing Fuji Soft situation specifically, Suekane said that for every proposal it makes, Bain Capital carefully examines if the proposal has “a good cause.’

“It is important for us that our proposal will help the company to increase their corporate value, if it’s good for its employees, management team, and even for Japanese society in the broader perspective,” Suekane noted.

“We have our business in Japan from twenty years ago and have the will to continue it for another 50 to 100 years. If we were to do something without a good cause even once, it would impact our future business,” he said.

In Japan, there has been a debate over who ‘owns’ a company, and the answer has changed over time, Suekane noted.

“In the past, creditors had more power, but recently, shareholder rights have increasingly been highlighted. Under such circumstances, we are seriously considering who we can bring value to and in what way,” Suekane noted.