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JAN 26, 2007

Round-the-World Business Trip 2007. No. 4: A Brief Profile of European Investors

By Yoshito Hori
Copyright GLOBIS

Bright and early, I arrived at Boston’s Logan Airport, made my way to the check-in counter, and promptly discovered that my British Airways flight to London had been canceled.

Luckily, there was an American Airlines flight I could transfer to, so I boarded the bus across the terminal and tried to take the change of plans in stride.

At airport security, my bag was thoroughly examined for nearly a half hour. My lip balm and hand lotion—both nearly used up—were confiscated. Security at the Boston airport was particularly tight since it had been one of the points of departure for terrorists who had hijacked flights associated with 9/11. But understanding all this didn’t make the experience any easier.

I finally boarded the American Airlines flight, and several hours later, we had crossed the Atlantic and touched down in Heathrow Airport, where I boarded the express train into central London. It was after 11 pm when I reached the hotel, so I just showered and got ready for bed.

Of course, it was actually Monday morning in Tokyo, and I was suddenly flooded with email. I dealt with the most urgent of them and called it a day.

The next morning, I finished replying to the email deluge from the previous night and took a break in the swimming pool. I hadn’t been able to find time to swim in New York and Boston, and therefore felt somewhat stiff.

The European general investors meeting, involving investors in GLOBIS based in Europe, was scheduled to begin at noon. European-based investors were drawn from six cities in as many countries: London, the U.K.; Zurich, Switzerland; Munich, Germany; Oslo, Norway; Reykjavik, Iceland; and Paris, France.

These investors can be loosely divided into the following groups and ratios of capital contributions that make up the GLOBIS fund.

1) Public pension institutions (5%)
2) Private pension institutions (25%)
3) Life, damage insurance companies, banks, and other private financial institutions (20%)
4) University and foundation funds (5%) 
5) Government-related banks and investment institutions (10%) 
6) Individual investors (10%)
7) Funds of funds (25%)

To be able to meet investors besides those in Japan in my mission to raise funds, I had to travel across the globe to North America, Europe, Asia, Oceania, and the Middle East. Consequently, over the last 10 years, GLOBIS has established three funds and today manages funds at the scale of 40 billion yen.

Fund No. 1, established in 1996, consisted of funds gathered from five domestic investors.

Fund No. 2, launched in 1999, was a joint venture with Apax. In setting it up, I first looked to overseas investors to raise funds. Getting it started required me to cross the Atlantic Ocean seven times, the Eurasian sub-continent six times, and the Pacific Ocean five timesーa grueling schedule! By the end of these fund-raising “road shows,” I was either heavily jet-lagged or simply exhausted, and it took nearly half a year to get completely back on my feet.

I only had to visit the U.S. and Europe once to raise funds for Fund No. 3, which was structured just last year. I cut back investors to those already investing in GLOBIS or who had previously contacted me with strong interest in Japan. This made it possible to make fewer trips overseas. In addition, our funds have performed strongly over the past 10 years, and I felt my continuous annual visits to investors were starting to bear fruit. There was no need for last-minute trips to pamper anyone.

The geographical breakdown of investors in GLOBIS looks like this:
The U.S.: 50%
Europe: 25%
Asia (excluding Japan): 10%
Japan: 15%

This is a genuinely worldwide operation. All it would take would be the addition of investors from Australia and the Near or Middle East into this mix, and I’d be able to virtually cover the entire globe.

The London general investors meeting brought together investors from Munich, Oslo, and of course London. I was deeply indebted to each of these investors for having come all the way to London. Some had been with me since setting up Fund No. 2, while others were new investors who came on board with Fund No. 3. I made my presentation, which took twice as long as the one in New York, and I responded to every question. Any inquiry I was not able to handle directly at the session, I promised to answer by email.

I thanked the investors and, after saying my goodbyes, accompanied a venture capital colleague on a courtesy call on our partner, Apax. We finished up sometime after 3 in the afternoon, and my next stop wasn’t until after 6 at the London Business School (LBS), where I was scheduled to speak.

I got to thinking about how I could best spend my time until then, and considered visiting a shop on Jermyn Street, the site of a gentlemen’s outfitters where I purchased tailor-made suits every year. Then I remembered about the strong pound and weak yen, and decided to head for the National Gallery in Trafalgar Square instead.

I left my belongings at the cloakroom, and for more than two hours enjoyed a relaxed walk through the galleries, including a special “Manet to Picasso” exhibition. I even had time to take in the video commentary.

The permanent exhibitions were also a rich treasure. I’ve been to the National Gallery more times than I can remember, but I am always surprised at how I continually experience paintings in new ways. For example, I had absolutely no interest in Christian-influenced paintings before, when I had been most drawn to the periods from Impressionism to Cubism (the “Manet to Picasso” period). This time, however, I felt a strong pull toward the religious paintings on display.

The artist who had perhaps the biggest impact on me this time was Turner. There is a genuine depth in Turner’s work. It struck a chord within my heart, and I couldn’t drag myself away. As I whiled away the time, the moment for my speech drew closer. I retrieved my things from the cloakroom and headed to the meeting. 

About 50 students and other people had gathered in the LBS classroom. Until now I had always addressed audiences in English (and to be honest, I wanted to do the speech in English), but today, for some reason, I was asked to speak in Japanese. Then, as I had done in Chicago, New York, and Boston, I took time to carefully answer every question.

Afterwards, I headed to a dinner session. It was a standing affair, and I felt that I was meeting a few talented people who just might join GLOBIS in future. When the party ended, I met up with a friend and didn’t get back to my hotel until well after midnight.

And that was it: I had finally checked off every item in my round-the-world business trip! All in all, I was pretty pleased, having followed my plan to do as few meetings as necessary with an emphasis on quality over quantity.

The next morning, London experienced its first sunny day in a long time. In the taxi to the airport, I phoned my home in Tokyo to have a quick chat with my wife and speak to each of my sons. I don’t have any more overseas business trips scheduled until April, so for a while, I’ll concentrate on more domestic duties.