The state-backed Development Bank of Japan has launched a ¥150bn ($1.6bn) fund to provide growth capital for local businesses.
The bank issued a statement saying the vehicle has been designed to boost competition in the Japanese market, AVCJ said.
DBJ did not say whether it would prioritise any specific sectors or reveal the expected size of its investments, but said the fund could be expanded further within a year.
The timing of the launch is rather curious as only last week it was reported that a group of buyout majors urged Japan to limit the presence of government-backed funds, which they said delayed restructuring for troubled companies.
Firms including KKR, Carlyle and Bain Capital said the state-backed funds – two of which have a combined capacity of up to $37bn – limit opportunities for private capital, Reuters reported.
The report cited the example of KKR, which has recently lost the bidding war for chipmaker Renesas Electronics Corp to state-backed fund Network Corporation.
Government funds frequently favour softer restructuring plans than outside investors.
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