Bain Capital has exited its entire direct stake in Kioxia Holdings Corp. (KXIAY), a Japanese flash memory chipmaker, closing a major chapter in one of Japan's most closely watched technology investment stories. Bain Managing Partner David Gross said the U.S. private equity firm no longer holds a stake in Kioxia, after the company's shares surged more than 4,500% from their debut following a wave of AI-driven demand for memory and data storage. The investment began in 2018, when a Bain-led group that included SK Hynix Inc. (HXSCL), a South Korean memory chipmaker, acquired Toshiba Corp.'s former memory operations for $18 billion.
Kioxia shares rose around 7% Thursday in Tokyo, as investors continued to price in strong demand tied to AI adoption. The stock has still fallen around 30% from its June peak, but its rally since listing in 2024 has made it the best-performing stock on the MSCI World Index. Ikuo Mitsui, a fund manager at Aizawa Securities Co., said the ability to absorb such a large share sale suggests buyers remain present, including overseas institutional investors, while the exit may reduce concerns that Bain could continue selling into the market.
The Kioxia deal also appears to strengthen Bain's position in Japan's private equity market as the firm prepares to deploy capital from its recently raised $10.5 billion Asia fund. Gross said much of that capital will be invested in Japan, where buyouts have been supported by cheap local financing, a weak yen, and reforms encouraging companies to go private or sell subsidiaries. Bain, which has about $225 billion in assets under management, sees opportunities in areas such as health care, digital infrastructure, semiconductor equipment, energy systems for data centers, software, and applications, although Gross said no deal is likely to resemble Kioxia because Japan has only one major memory company.