MBK Partners obtained approval from the Committee on Foreign Investment in the United States (CFIUS) during its investment push for Japanese machine tool maker Makino Milling Machine, the firm said. CFIUS approval is granted after a review of deal structure, governance, and investor composition.
MBK said Tuesday that it received investment approval through a CFIUS review during its attempt to acquire Makino in the first quarter of this year. Makino, a Japanese machine tool manufacturer, operates a facility in Ohio employing approximately 600 people, making any acquisition of its management control subject to CFIUS screening. The committee comprehensively examines deal structure, governance, investor composition, the independence of the fund manager, sensitive technologies, and national security-related factors. MBK passed the CFIUS review. As a private equity (PE) fund manager, MBK had its independence recognized by U.S. regulatory authorities.
Recently, some observers have questioned the independence of MBK's funds, citing a Chinese fund's investment in a vehicle managed by the firm. China Investment Corporation (CIC), China's sovereign wealth fund, is known to have committed approximately 500 billion won to MBK's sixth fund. During its management control dispute, Korea Zinc raised concerns that CIC represented a potential backdoor investment by Chinese capital into a strategic national industry. However, limited partners (LPs) in PE funds are financial investors, and individual investment, operational, and divestment decisions are made independently by the fund manager. CFIUS reportedly confirmed that MBK's structure—covering investor composition, governance, information access rights, and decision-making systems—shields the firm from potential outside influence.
The CFIUS review is led by the U.S. Department of the Treasury and involves the Departments of Defense, State, Commerce, Justice, Homeland Security, Energy, and the Office of the U.S. Trade Representative (USTR). The process is designed to assess the impact of foreign investment on a whole-of-government basis. Companies seeking to make new investments in the United States typically prepare for CFIUS review with the help of outside advisers.
