Japan’s Norinchukin shops $5bn portfolio

The sale of the portfolio, which is largely unfunded, follows the banking giant's February sale to buyers including Lexington Partners.

Norinchukin Bank, one of Japan’s largest financial institutions, is looking to sell a private equity fund portfolio in what would be the largest-ever such sale.

The Tokyo-headquartered bank is working with advisor Greenhill to offload the portfolio worth more than $5 billion in net asset value and unfunded commitments, according to three sources familiar with the matter.

The portfolio is around 75 percent unfunded contains around 35 fund stakes, according to two of the sources. It is being shopped to a select set of buyers and the portfolio contains young vintages, it is understood.

PE Hub first reported that Norinchukin was selling another large portfolio.The sale comes six weeks after Norinchukin’s sale of around $1.3 billion worth of stakes to buyers including Lexington Partners, as Secondaries Investor reported. Norinchukin wants to sell the portfolio to comply with Japanese regulations that affect banks with overseas operations, according to one of the sources.

Funds Norinchukin has committed to include TDR Capital’s 2013-vintage €2.1 billion TDR Capital III fund, Montagu Private Equity’s 2015-vintage €2.75 billion Montagu V fund and EQT’s 2015-vintage €6.8 billion EQT VII fund, according to PEI data.

Norinchukin also tapped the secondaries market in 2017 when it sold a portfolio of around $100 million in tail-end stakes to Strategic Partners.

Financial institutions accounted for around 26 percent of sellers last year, according to UBS’s 2019 Secondary Market Survey and Outlook. Deal volume for private equity was around $67 billion, according to UBS.

Asian sellers comprised 10 percent of last year’s deal volume, UBS found.

Norinchukin did not return requests for comment. Greenhill declined to comment.