Japanese LP
💸 $B++ Institutional Limited Partner (LP), based in Japan, has a global portfolio of 100+ VC funds and plans to resume VC investments in Q2 2024.
The insights below come from a conversation with a multi-billion dollar institutional LP based in Japan (source of wealth: finance).
🧠 Investment Philosophy
Investments are based on strategic returns (vs. just financial returns), i.e., how will the underlying operating business benefit from the investment.
Explore relationships where they can help underlying portfolio companies expand into Japan.
📊 Portfolio Construction
Invest primarily in funds, globally. 50% local Japanese funds, 50% external, concentrated in US and Western Europe, with some exposure in Asia, Australia, and Africa.
Over 100 fund commitments, with average check size of $5M-10M.
🚀 Venture Portfolio
Most (over 70%) of fund commitments are in venture. Focus has been on institutional funds (no first time funds) focused on Series A / B, ideally $100M - $300M in size, with a few commitments made to smaller funds too ($50M+).
Not exploring biotech / life sciences (lack subject matter expertise); primarily technology.
🔮 Looking Forward
Not reinvesting with a lot of managers due to liquidity constraints. Distributions (DPI) from funds have been limited.
Currently in defense mode, focusing on their existing portfolio.
In process of raising a venture fund-of-funds focused on international (including US & Europe) early-stage VCs. Expect to resume VC investment in Q2 2024.
Looking to extend sponsor relationships with mega-cap buyout funds as well as mid- to large-sized funds.
✍🏼 Lessons Learned / Advice
For LPs: Align on expectations of the LP-GP relationship, prior to investment. Post-investment, active relationship building is key to a successful collaboration. Do the work to be an effective operating partner for your GPs and portfolio companies, if you define yourself as a strategic LP. Trust and brand will follow.
For GPs: When pitching to institutional LPs, customize your message based on their investment philosophy, e.g., how will you benefit their underlying operating business.
🙏 Special thanks to the Investment Director for generously sharing their insights (shared with their permission, on the condition of anonymity).
🎷 Connect and Collaborate
Family Offices & LPs: connect with a curated group of global LPs in HYPHAH’s LP Salons.
Venture Funds (US & Europe): If you have a $100M+ early stage fund, please e-mail connect@hyphah.com to connect with this LP (double opt-in).
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