The Worldfolio: WM Partners Advances Japan’s Private Capital Market Through Growth Investing, Secondaries and Emerging Managers
JAPANFINANCEASIA-PACIFICJAPANVENTURE CAPITALSECONDARIESGROWTH CAPITALPRIVATE EQUITY
WM Partners Advances Japan’s Private Capital Market Through Growth Investing, Secondaries and Emerging Managers
WM Partners is a Japanese private equity firm founded in 2013 that focuses on growth investing, secondaries and support for emerging venture capital managers. Beyond providing capital, the firm works closely with management teams while also helping strengthen the infrastructure, liquidity and institutional foundations of Japan’s broader private capital market.
YASUO TOKUNAGA | PRESIDENT OF WM PARTNERS
Could you walk us through the history and evolution of WM Partners?
Before I get into WM Partners’ history, let me briefly share my own career background.
In 2003, I joined Japan Asia Investment Co., Ltd. (JAIC), a listed investment company, where I spent ten years before founding WM Partners in 2013 and becoming its president. I have now spent more than 20 years in a private equity career.
The single biggest turning point for me as an investor was going through the “hardships” of the Global Financial Crisis in 2009 during my time at JAIC. At the time, JAIC made the decision to use the “Business Revitalization ADR” scheme, which had only just been enacted into law in 2008. Total liabilities stood at roughly JPY 40 billion, but JAIC chose not to pursue any haircut on debt and interest. Moriyoshi Matsumoto, who is now WM Partners’ Chairman, took over as JAIC’s president at the time, and I served as a member of the president’s office, standing at the front line of this brutal restructuring and the new business development that our survival depended on. It was through this crucible that I learned the true essence of investing and management — and it remains the foundation of WM Partners’ strategy today.
Let me return to WM Partners’ history and development. When we spun out of JAIC in 2013 to launch WM, we carried an extremely heavy cross to bear. Japan’s financial industry is extremely cautious toward credit that has once been damaged. “There’s no way we could invest in an emerging fund manager who spun out of a firm that caused trouble for financial institutions” — that was the reality we faced at the time. Yet there were investors who believed in our potential and were the first to extend a hand: the Development Bank of Japan (DBJ), a government institution, the Organization for Small & Medium Enterprises and Regional Innovation (SMRJ), and, from the private sector, Mizuho Securities.
From this experience, we resolved never to forget our gratitude to those who gave us a chance when others around us feared the risk, and we defined WM Partners’ purpose as contributing to the development of Japan’s PE/VC industry and actively taking on risk to challenge areas that no one else was willing to touch. In 2026, we adopted “We Move to the Next” as our new corporate slogan. Seeking out areas where we can contribute is not simply about growing assets under management or diversifying for its own sake.
Our investment strategies can be divided into three parts.
The first began in 2017, when we built out our growth-buyout capability and began investing in 2018. While deal sizes are not large, we invest in a cohort of companies that is not adequately served by either venture capital or traditional buyout funds.
The second began in 2021, when we launched a fund-of-funds dedicated to secondary investing together with Alternative Investment Capital Limited. The first fund raised JPY 10 billion and was fully invested within its first three years; by 2024 the fund had grown to JPY 30 billion, making it the largest of its kind in Japan.
The third begins in 2026, when we will launch the Emerging Manager Program for Japanese venture capital funds. Through this program, we run a fund-of-funds dedicated to newly established venture capital managers and act as a comprehensive growth engine for these GPs through three core pillars: (i) Anchor Capital, (ii) Expert Advisory, and (iii) Operational Base
Apart from these investment businesses, our group company, wizz Fund Associates, provides back-office functions for private equity and venture capital funds, including fund administration, accounting, and other support services for GPs.
Japan has increasingly distinguished itself as one of the most attractive private equity markets globally at a time when deal activity across North America and Europe has become more subdued. Investors point to a combination of corporate governance reform, structural economic change, and an increasingly supportive investment environment as reasons why Japan is entering what many believe could be a prolonged period of expansion for private capital. At the same time, Japanese companies themselves are undergoing fundamental transformation as management teams respond to greater pressure from shareholders, regulators, and global competition. Looking ahead, why do you believe Japan’s private equity market is positioned for sustained growth, and what are the most important structural changes taking place within Japanese corporations that are driving this opportunity?
The most significant development has been the transformation taking place inside Japanese companies themselves. For listed companies in particular, the implementation of corporate governance reforms, together with the reforms introduced by the Tokyo Stock Exchange, has fundamentally changed the expectations placed upon management teams. Executives today face much greater accountability than they did in the past, and that pressure is encouraging companies to reconsider not only their capital allocation policies but also the way they manage their businesses over the long term.
Importantly, this transformation extends well beyond measures such as increasing dividends or conducting share buybacks. Those actions alone do not strengthen a company’s long term competitiveness. Japanese companies now recognize that they are operating in an increasingly competitive global marketplace where incremental financial adjustments are no longer sufficient. Instead, management teams are being required to undertake a comprehensive review of their business strategies, organizational structures, and growth plans. I believe this represents one of the most significant shifts we have seen over the past year.
Japan’s macroeconomic environment also remains relatively favorable. Compared with many overseas markets, financing conditions continue to benefit from lower interest rates, creating an attractive backdrop for investment. However, low borrowing costs alone do not explain the current momentum. The more important change is psychological. Corporate leaders increasingly understand that meaningful transformation is no longer optional. There is now much broader recognition that companies must fundamentally improve their competitiveness if they are to succeed over the long term.
That shift in management mindset is creating a much healthier environment for private equity investment. Rather than focusing primarily on short term financial performance, more companies are beginning to embrace long term structural reform, operational improvement, and sustainable growth. Those changes are creating significantly more opportunities for investors who can actively support corporate transformation.
Alongside these governance reforms, Japan is also experiencing a profound demographic transition. As many founders and business owners from the Baby Boomer generation approach retirement, a new generation of second and third generation executives is assuming leadership across thousands of Japanese companies. Many of these younger leaders have built careers at other large organizations before returning to their family businesses, bringing with them different perspectives on growth, risk taking, and corporate strategy. At the same time, succession remains one of the most pressing challenges facing Japan’s small and medium sized enterprises. How is this generational transition reshaping Japanese companies, and what implications does it have for private equity and growth investing?
Simply replacing one business owner with another does not fundamentally change a company’s performance. If a founder retires and ownership passes to a successor, the company’s sales, profitability, and overall competitiveness will generally remain unchanged unless management itself begins to think differently.
What is encouraging today is the growing number of second and third generation business leaders who have developed their careers outside their family companies before returning to assume management responsibilities. Many have previously worked at major trading companies, consulting firms, or other large corporations, where they were exposed to broader management practices, strategic planning, and international business perspectives.
As a result, these younger executives often return with a much stronger ambition to expand their companies rather than simply preserve what already exists. Instead of viewing succession as the continuation of an existing business, they increasingly see it as an opportunity to build larger, stronger, and more competitive organizations. The number of these next generation managers continues to grow in Japan, and I believe this represents a very positive development.
Japan continues to face a significant shortage of business successors, but succession alone does not solve the country’s broader economic challenges. Simply transferring ownership from one generation to the next will not increase GDP, improve productivity, or raise wages. Those outcomes can only be achieved if companies themselves continue to grow.
That is why growth strategies have become so important. We are seeing more companies actively pursuing expansion, including acquisitions of businesses operating in adjacent industries through mergers and acquisitions. Rather than focusing solely on maintaining existing operations, management teams are beginning to think about how to increase corporate scale, improve competitiveness, and generate sustainable long term growth.
As more companies adopt this mindset, they contribute not only to their own development but also to the revitalization of Japan’s broader economy. I believe the emergence of this new generation of management and its willingness to pursue growth rather than simply preserve the status quo is one of the most meaningful structural changes taking place in Japan today.
As this investment environment evolves, many entrepreneurs are also rethinking what they expect from outside investors. Increasingly, business owners appear to be looking beyond capital alone and instead seeking long term strategic partners who can help shape the company’s next stage of development. Whether through acquisitions, overseas expansion, management recruitment, or organizational transformation, the role of an equity investor is becoming much broader than simply providing financing. How does WM Partners define its growth investment philosophy, and what do you believe distinguishes a true equity partner from a traditional financial investor?
Historically, many venture capital investors encouraged companies to pursue an IPO within a relatively short period of time. Conventional private equity investors, meanwhile, often focused primarily on acquiring ownership and utilizing financial leverage.
Many entrepreneurs have gradually become dissatisfied with those traditional approaches.
Today, management teams are increasingly looking for partners who will work alongside them to design the company’s next growth curve and help them navigate the transition to the next stage of corporate development. Rather than simply providing capital, they are seeking investors who can participate in long term strategic decision making.
In reality, the people who understand a company’s future opportunities best are often its own executives and employees. They may have spent decades building the business and possess knowledge that no outside investor can replace. Our role is therefore not to tell management how to run their company. Instead, our responsibility is to help them overcome the limitations preventing them from achieving their ambitions.
Sometimes that means providing growth capital. In other situations, it involves supporting mergers and acquisitions, helping execute industry consolidation strategies, assisting with overseas expansion, or introducing expertise that the company does not currently possess. Every company faces different challenges, and our role is to support management in accomplishing initiatives they already recognize as important but cannot yet execute independently.
Another important characteristic of Japanese companies is that many business leaders operate in relative isolation. It is often difficult for executives to find someone with whom they can openly discuss strategic management issues. In some cases, companies also lack experienced management talent capable of supporting the next phase of growth.
We therefore spend considerable time acting as a strategic sounding board for management teams. We also help recruit talented executives who can strengthen the organization from within. Even these initial steps can fundamentally change a company’s trajectory and create the foundation for sustained long term growth.
One of the defining characteristics of WM Partners is its focus on what you describe as “Adult Ventures,” companies that have often been operating for ten or even twenty years but have not yet reached the scale typically associated with traditional leveraged buyouts. These businesses have generally moved beyond the startup phase, yet they still possess significant untapped growth potential. At the same time, this segment appears to attract relatively few investors, despite the opportunities it presents. Why has this area remained underserved within Japan’s private equity market, and what makes it attractive for your investment strategy?
The environment in Japan has historically provided buyout funds with a large number of investment opportunities, particularly those related to business succession. As Japan has faced a shortage of business successors, there has been no shortage of companies requiring ownership transitions. From the perspective of a traditional buyout fund, there have been more than enough attractive opportunities available without having to move into growth investing.
Supporting growth, however, requires a very different approach. Helping a company expand its business, strengthen its competitive position, and execute a long term growth strategy is considerably more difficult than completing a conventional leveraged buyout. Growth investing demands continuous involvement with management and a willingness to work alongside the company over an extended period of time. As a result, many investment firms have naturally prioritized succession related transactions where they already had abundant opportunities.
From the very beginning, however, our philosophy has been different. Our objective has always been to help companies grow rather than simply facilitate ownership transfers. Because growth has been central to our investment strategy since our establishment, we have continued to develop expertise in this area while many others remained focused elsewhere.
Looking ahead, I believe the market will gradually change. The number of high quality succession transactions is not unlimited. As demographic transitions continue and the most attractive succession opportunities are gradually completed, other private equity firms will increasingly need to expand into growth investing. Over time, I expect more funds to move in this direction, but because we have been building these capabilities for many years, we believe we have established an important advantage.
Another distinctive aspect of WM Partners’ business is its active participation in Japan’s private equity secondary market. Compared with more mature markets overseas, however, Japan’s secondary market remains relatively underdeveloped despite its potential to improve liquidity and create additional investment opportunities. What initially attracted WM Partners to this segment, and why do you believe the secondary market has evolved more slowly in Japan than in other countries?
Since our establishment, WM Partners has viewed one of its core missions as contributing to the development of Japan’s private equity and venture capital industries as a whole.
One of the principles that has guided our business is a willingness to enter areas where few or no domestic participants are active. When we recognized that Japan lacked a meaningful secondary market for private equity interests, we concluded that this represented an important gap within the broader investment ecosystem.
That led us to establish a partnership with Alternative Investment Capital Limited and actively participate in building this market.
One reason the secondary market has developed more slowly in Japan is cultural. Generally speaking, Japanese investors have traditionally preferred to continue holding assets rather than selling them. There is often a stronger inclination to maintain ownership over long periods, and many institutions have had relatively little experience with secondary transactions.
Another important factor is the absence of sufficient market infrastructure.
A secondary market depends on both buyers and sellers. Historically, there have simply not been enough buyers participating in Japan. Without a sufficiently active market, sellers have often found it difficult to determine whether a proposed transaction price is truly appropriate.
Compared with overseas markets, Japan has also lacked the network of brokers and intermediaries capable of providing independent guidance regarding pricing and market value. Without that reference point, organizations frequently struggle to justify selling assets internally because they cannot confidently demonstrate that the valuation is reasonable.
For these reasons, the market has developed much more gradually than in other regions.
Developing a new market requires more than simply providing liquidity. Institutional investors also need education, pricing transparency, and confidence in the transaction process before secondary investing can become widely accepted. Beyond participating as an investor, how is WM Partners working to help establish the broader foundations necessary for Japan’s secondary market to mature?
We recognize that helping to build the market is just as important as participating in it.
Our work therefore begins with education. We spend considerable time explaining how secondary transactions function and why they can become an important component of portfolio management.
Because we regularly value investment funds ourselves, we are also able to provide market participants with objective information regarding pricing. Presenting these valuation frameworks helps investors develop greater confidence in the fairness of transaction prices.
Another challenge is that many limited partners have established procedures for making investments but have never developed internal processes for selling fund interests. In many organizations, the decision making framework simply does not exist.
As a result, we often begin by helping investors understand how a sale should be conducted, what internal procedures are necessary, and how those transactions should be evaluated.
Building the secondary market therefore requires not only capital but also education, transparency, and trust. We believe all of these elements are necessary if the market is to continue developing over the long term.
Alongside your work in growth equity and secondaries, WM Partners is also expanding its activities to support Japan’s venture capital ecosystem. While Japan has produced a number of highly respected venture capital firms, many observers believe the industry remains relatively young compared with more mature markets overseas, particularly in terms of institutional fundraising, governance, and operational infrastructure. From your perspective, what are the biggest challenges facing Japanese venture capital today, and why did WM Partners decide that supporting this ecosystem should become part of its long term strategy?
Japan certainly has outstanding venture capital firms. There are top tier managers that have built excellent investment records and made important contributions to the startup ecosystem.
However, when looking across the industry as a whole, I believe the venture capital market is still developing.
One of the most significant differences between venture capital and the more established private equity industry lies in the composition of investors. Many Japanese venture capital funds continue to rely heavily on operating companies as their primary investors. By comparison, relatively few have been able to attract substantial commitments from domestic institutional investors, financial institutions, or overseas limited partners.
This represents an important difference because a broader institutional investor base contributes to stronger governance, more stable fundraising, and greater international credibility.
The second challenge relates to operational infrastructure.
As venture capital firms begin raising larger funds from institutional investors, investment capability alone is no longer sufficient. Investors increasingly expect sophisticated governance frameworks, robust compliance systems, transparent reporting, and professional fund administration.
Many Japanese venture capital firms remain in the process of building those capabilities.
We believed we could make a meaningful contribution because our experience extends across several areas of private capital. Through our group company, wizz Fund Associates, we have considerable expertise in fund administration and operational infrastructure. Through our secondary investment activities, we also maintain relationships with a wide range of institutional investors and fund managers.
Supporting venture capital may appear separate from your core investment activities, yet it also creates connections with emerging technologies, innovative business models, and the next generation of entrepreneurs. As WM Partners expands its involvement across growth equity, secondaries, fund administration, and venture capital, are you also creating strategic synergies that strengthen your own investment platform, while contributing to the broader development of Japan’s private capital market?
Our objective is not to become a venture capital firm ourselves.
Instead, we believe that supporting venture capital managers allows us to participate in the broader development of Japan’s innovation ecosystem while also creating benefits that extend across our existing businesses.
Through these relationships, we gain earlier access to information about emerging technologies, innovative services, and new business models being developed by startups throughout Japan.
That knowledge is valuable because many of the companies in which we invest through our Growth fund are established middle market businesses seeking to enter their next phase of growth. Introducing new technologies, digital solutions, or innovative business models into those companies can help accelerate their transformation and improve their competitiveness.
In that sense, supporting the venture capital ecosystem creates an important bridge between startups developing new ideas and established companies looking for practical ways to modernize their businesses.
There are also broader strategic benefits.
Today, WM Partners operates across several different segments of Japan’s private capital market, including growth capital, secondary investments, fund administration, and support for venture capital firms. While each business has its own purpose, together they create a much broader platform through which we can contribute to the development of the entire private market ecosystem.
We have always believed that our role extends beyond managing individual investment funds.
Our broader mission is to contribute to the long term development of Japan’s private capital industry itself. By helping strengthen market infrastructure, supporting new fund managers, improving liquidity, encouraging innovation, and expanding opportunities for growth investing, we believe we can contribute to a healthier and more dynamic investment environment.
As Japan’s private capital market continues to mature, we hope that WM Partners will continue to grow alongside it. Our success is closely linked to the success of the broader market, which is why we have consistently invested not only in companies but also in the infrastructure and institutions that support the industry’s long term development.
How do you want your investor base to evolve as international capital turns toward Japan? What would you want international readers to understand about Japan’s growth and secondaries opportunities?
More than a decade has passed since the hardships of our founding. Many of the financial institutions that once said “no” to us have now become LPs in our funds. We would like to once again express our gratitude to the Japanese financial institutions that have entrusted us with capital as a result of our track record of dealing with them in good faith.
As Japanese PE/VC funds increasingly raise capital from overseas investors, we too are now considering raising capital from international investors going forward. In particular, we believe our Secondaries fund — which limits risk while securing early liquidity — is an ideal strategy for overseas investors, serving as the “best entry platform” for building toward full-scale investment in Japan.
For global investors, Japan’s private markets are attractive, yet barriers of information access and language make it very difficult to properly evaluate individual funds and GPs. WM Partners’ Secondaries fund offers overseas investors something beyond simply strong returns: the function of a fund-of-funds capable of comprehensively monitoring PE/VC funds across the entire Japanese market.
In 2026, we will also launch Japan’s first full-scale emerging-VC support program (VC-EMP FOFs). In Japan’s still-maturing private capital market, we consider ourselves a platform that is helping to lift the market as a whole. We hope overseas investors will come to recognize the value of accessing Japan’s deepest networks and infrastructure through WM Partners.
For more information, visit their website at: https://www.wmpartners.jp/
