Singapore-based private equity firm Affirma Capital has invested $38.5 million in Japan-based, Korea-listed tax-free retail chain operator JTC Inc for a 30.1% stake.

Affirma has also bought a call option to purchase the founder’s stake of 22.3%, it said in a statement on Tuesday. The call option can be exercised between April 2023 and October 2024 at a 30% control premium from the primary shares’ entry price, the statement added. The share subscription price is 30-50% of JTC’s 2019 share price range, it added.

Founded in 1993 by the Korean-Japanese businessman Chairman Koo, JTC runs 16 stores in Japan, which waives the 10% consumption tax for tourists.

The JTC deal marks the first investment in Japan by Affirma.

JTC expects a strong tailwind from Japan’s border reopening after COVID-19 as well as the continued depreciation of the Japanese Yen, Affirma said. Backed by a robust relationship with travel agencies and the shutdown of major competitors’ stores during the pandemic period, JTC is expected to solidify its premier positioning going forward, according to Affirma.

“We are confident about the bounce back of the tourism industry in Japan, which had Asia’s third largest international arrivals before COVID-19. We project the Japanese tourism industry to fully normalise and JTC to consolidate market share by 2025-2026,” said Taeyub Kim, co-founder and head of Korea at Affirma Capital Korea.

Affirma is the former private equity business of Standard Chartered. The firm closed its fifth Korea fund, Ascenta V, at 543 billion won (about $473 million) in October last year — the first fundraising following its spin-off from Standard Chartered in August 2019.

It has, to date, deployed over $6 billion in over 100 companies, and currently manages $3.2 billion in assets.

In September, DealStreetAsia reported that Affirma was looking at raising a new fund focused on Southeast Asia and India.