H&Q exits MTV Japan

It took awhile, but Japan, too, wants its MTV.

H&Q Asia Pacific, the private equity firm that brought MTV to the Japanese market, is profiting from the re-emergence of the music television brand, and has agreed to sell its nearly 70% stake in MTV Japan to Viacom, which owns the balance. Terms of the deal are undisclosed.

H&Q’s investment in MTV Japan dates back to the firm’s 2000 acquisition of the Japanese music channel Vibe from Pioneer Electronic Corp. Then, in 2001, H&Q brought Viacom in as a minority partner, and through a joint venture the companies turned Vibe into MTV Japan.

H&Q is developing a reputation for taking iconic brands in the West and guiding them into the Asian markets where entry can be sometimes tricky. The firm introduced Starbucks to China, opening the first store in Beijing in 1999, and has since launched 58 new Starbucks in and around Beijing and Tianjin. The firm took a similar approach in its investment in MTV.

“Everyone is emphasizing the technology and manufacturing strength of the Asian economy, but lately people are starting to realize that countries such as Japan, Korea and even China represent an emerging consumer market,” says H&Q founder Ta-lin Hsu.

Hsu maintains that re-establishing the MTV brand in Japan would not have worked had the investors just imported the U.S. model. “We very much emphasized the local content,” Hsu says.. “We did share content [with MTV], but that was initiated by MTV Japan. It wasn’t a case of the U.S. shoveling content into [MTV Japan’s] throat.”

Hsu would not comment on the size of H&Q’s return outside of characterizing it as “very good.”

The firm invested in MTV Japan from its third fund, Asia Pacific Growth Fund III, a $750 million fund that closed in 2000. This past January, the firm announced the close of its latest vehicle, Asia Pacific Growth Fund V, which corralled $500 million of capital.

H&Q was originally founded as a partnership between Hsu and Hambrecht & Quist Group, and now operates out of Hong Kong, Seoul, Shanghai, Taipei, Tokyo and Silicon Valley. —Ken MacFadyen