Coller Increasing Japanese Exposure

TOKYO (Reuters) – Coller Capital Ltd, an investor in private equity secondaries, said it would invest more money in Japan than it had planned as it expected the market to become more liquid.

The London-based fund, which raised $4.75 billion in April last year, plans to allocate as much as 20 percent of the money to Japan, Hiro Mizuno, a Coller Capital partner, told Reuters in an interview on Friday, an increase from the earlier plan of 10 percent.

“There's tail wind now,” said Mizuno, who joined the firm in 2003 from the private equity division of Sumitomo Trust Banking Co (8403.T: Quote, Profile, Research, Stock Buzz). “From next year we expect more liquidity in the market. More funds will look for exit opportunities. Some funds may decide to leave the market due to more competition.”

Mizuno said Japan's private equity market took off around 2003. Funds typically allow investors to exit after five years, and that time will be up around next year, he said.

Coller Capital, which buys assets from investors making early exits from existing funds, has hired three people who speak Japanese in its London office, Mizuno said. It does not have an office in Japan.

Coller Capital's recent investments in Japan include a purchase of a quarter stake in RaQualia, a pharma venture that was recently spun off by drug maker Pfizer Inc (PFE.N: Quote, Profile, Research, Stock Buzz).

The world's largest drug maker decided in January 2007 to spin off its research and development laboratory in Nagoya, central Japan.

Japan's NIF SMBC Ventures Co is the top shareholder of RaQualia Pharma Inc, with Coller Capital holds the second biggest chunk of ownership in the venture and Pfizer is the third-largest shareholder.

Although this investments did not take a form of the secondary investment, Coller Capital aims to drive its secondary private equity investment business in Japan, said Mizuno.

Coller Capital last year invested in Forbion Capital Partners, a life science venture ABN AMRO Capital spun out. ABN AMRO Capital is the private equity arm of the Dutch bank ABN AMRO Holding AABA.TI.

By Junko Fujita and Yuka Obayashi

(Editing by Sophie Hardach)