Investment Focus Areas
Based on its management philosophy, JIC provides risk capital to support corporate growth and enhance competitiveness through open innovation through investment in funds consistent with its principle of complementing the private sector.
JIC makes investments in accordance with “Investment Criteria”* based on the Industrial Competitiveness Enhancement Act. In order to supply risk capital to the four investment focus areas designated by the Investment Criteria (listed below), JIC promotes open innovation in Japan through the establishment of investment funds, and contributes to enhancing Japan's industrial competitiveness and expanding the investment ecosystem.
Creating a positive cycle of domestic investment and innovation
To enhance Japan’s industrial competitiveness, support business activities that contribute to a positive cycle of domestic investment and innovation in industries requiring sustainable growth and demanding significant amounts of risk capital over a long period.
Creating and developing startups
To accelerate the creation and nurturing of startups, which are drivers of economic growth and innovation, and to foster the creation of global unicorns, support businesses that contribute to the development of the startup ecosystem.
Leveraging untapped regional management resources
Address the need for funding among local academic startups, leading medium-sized enterprises that possess technologies with high earning and innovation potential that are not being fully leveraged due to a lack of risk capital and human resources.
Promoting business consolidation in response to changes in market and business environments
Support enhancement of industrial competitiveness through medium- to long-term growth investments and industry consolidation in business fields that can respond to recent changes in the business environment through business consolidation and renewal.
Of these, the following two areas are designated as investment focus areas for LP investments in buyout funds:
・Creating a positive cycle of domestic investment and innovation
・Promoting business consolidation in response to changes in market and business environments
Approach and Investment Themes for LP Investments in Buyout Funds
As market and business environments change drastically, it is increasingly important for companies in business fields that contribute to strengthening industrial competitiveness to advance large-scale growth investments, business restructuring, and management reforms necessary to develop next-generation industries.
Accordingly, from the perspective of encouraging business restructuring, corporate renewal, growth investments, and industry restructuring, JIC makes LP investments in buyout funds that have investment strategies in these areas.
To date, JIC has established two investment themes for LP investments in buyout funds: ① carve-out and roll-up strategies, and ② buyout funds that invest in large-scale transactions. In addition, buyout funds that adopt investment strategies in the GX area—an investment theme common to VC investments—are also included as investment targets.
Going forward, JIC will continue to consider adding new investment themes based on research and analysis of JIC’s policy significance and the need for the supply of risk capital.
JIC Investment Themes & Buyout Fund Selection Perspectives (as of July 2025)
Investment Focus Areas under JIC’s Investment Criteria and Investment Themes
Promoting business consolidation in response to changes in market and business environments
Carve-out/Roll-up
- Support bold business restructuring that transcends industry and organizational boundaries in business areas with the potential for international competitiveness, including a carve-out/roll-up strategy targeting manufacturing and other sectors lacking private investment.
Large Deal Buyout Fund
- In response to needs for greater diversity among players, and with the aim of further revitalizing business restructuring, JIC will invest in Japan-focused buyout funds with the intention and ability to handle deals with EVs of JPY100 billion or more.
(Assumes a fund size of approx. JPY200 billion or more)
Creating a positive cycle of domestic investment and innovation
Climate Tech
⇒ Expanding GX Target Areas
- Support the creation of innovative solutions and new businesses related to climate change, contributing to economic growth and decarbonization.
- Consider investing in funds targeting growth capital, buyouts, and infrastructure for domestic and international startups and mid-sized companies in the GX field.
Furthermore, through JIC Capital (JICC) which is a JIC Group company, we support bold business restructuring, which goes beyond the boundaries of industries and organizations, in business fields where private sector investment funds are lacking, including carve-out and roll-up strategies, such as those in the manufacturing.
We are implementing the following two initiatives.
Investment activities through JIC PE and JIC PE2
The JIC Group aims to strengthen industrial competitiveness and create social impact in areas such as the creation of new businesses and industries through GX/DX. In addition, we aim to contribute to the realization of Society 5.0, help resolve global issues, and strengthen the international competitiveness of domestic industries, while supporting industry restructuring. In November 2025, JIC PE2 was established as JICC’s second fund, which promotes the supply of risk capital, from a medium- to long-term industrial policy perspective, and aims to strengthen the competitiveness of domestic industries and support transition to a sustainable growth economy.
JICC: Minority Investments in Projects Led by Private Funds
Our target is projects that align with the themes and industries that JICC is focusing on.
- Themes: industry consolidation, growth investment, business restructuring
- Areas: JICC’s 9 focus areas
- Targets: common stock, preferred stock
- Amount: from the perspective of portfolio diversification, JICC’s portion is assumed to be less than JPY50 billion
- Case examples: Large-scale carveout, Mid-sized company rollup
JIC Investment Guidelines:
Perspectives and Evaluation Criteria for Fund Selection
JIC has published investment guidelines summarizing the perspectives on the suitability, expected performance, and governance of investee funds for LP investments into private venture capital and buyout funds. See below for details.
Investment guidelines
1
Structure and Organization
- The organization must be operated by a fully independent investment team, not a captive structure.
- The team must be dedicated to the fund business, without any other activities that could create a conflict of interest.
- The investment team should consist of full-time professionals whose sole responsibility is managing the fund, with no outside business interests that could create conflicts.
- The investment committee members should primarily consist of core members from the management company responsible for fund operations.
- The fund or investment professionals should have a track record that aligns with the fund’s investment strategy.
- The standard carried interest rate should be 20%.
- Additional payment (interest charge) incurred by subsequent LPs should be fairly allocated to existing LPs who participated before the relevant closing.
- The European waterfall model should be the preferred distribution method.
4
Alignment and Governance
- The GP commitment, key persons, and allocation of carried interest should all be aligned and consistent.
- For managers with multiple funds employing distinct investment strategies, a clear allocation policy should be proposed.
- Conflict of interest matters should principally require approval from the advisory committee.
- An annual general meeting and advisory committee meeting should be held at least annually.
- Conduct fair value assessments. (This includes fair value assessments of unlisted securities and the deduction of potential carried interest from LP interests in the capital account.)
- JIC's commitment as a proportion of the total among limited partners should principally be less than 50%, and any funds exceeding JIC's commitment amount should be raised from private investors.
- The managers must comply with JIC's requirement to form Code of Conduct / Code of Ethics (8 items) and Anti-Harassment Policy (10 items).
- The managers are required to establish and maintain a legal compliance system that meets key regulations, including the Financial Instruments and Exchange Act and anti-money laundering laws. Additionally, they must implement an effective information management system to properly safeguard personal and insider information.
- The fund size should principally exceed 6 billion yen.
If you have any questions about the above, please use the inquiry form below.
JIC Model Term Sheet
Purpose and Objective of this Publication
- Japan Investment Corporation (“JIC”) has been working to promote a virtuous cycle of risk capital.
- To achieve such a cycle, it is essential that sufficient funding be supplied to startups, particularly in their growth stages, and that capital from large-scale institutional investors be expanded. These priorities have also been emphasized in various recent government initiatives. As a government‑backed investment fund, JIC has been investing with the aim of expanding the number of VC firms that manage capital from institutional investors.
- As part of this effort, JIC has organized what it considers to be the key terms commonly required by institutional investors in limited partnership agreements (LPAs), and compiled them into the “JIC Model Term Sheet.”
- This Model Term Sheet follows the “Investment Guidelines” published by JIC in March 2025. While reflecting the fundamental investment principles set out in those guidelines, it focuses more specifically on contractual terms from the perspective of attracting capital from institutional investors—both domestic and international—who invest on a purely commercial basis. The purpose of this document is to clarify the principles that JIC considers essential for ensuring sound governance and achieving appropriate alignment of interests between the General Partner (GP) and Limited Partners (LPs).
- Investment in Japanese VC funds by domestic and overseas institutional investors remains limited. As a result, some LPAs contain contractual terms and conditions that may not be entirely favorable to LPs whose sole purpose is pure investment. JIC believes that publication of this Model Term Sheet will help expand institutional investor commitments to domestic VC funds, and ultimately contribute to the sustainable development of Japan's startup ecosystem.
Additional Notes on the Content
- This Model Term Sheet has been developed with VC funds in mind. While the fundamental principles—such as conflict of interest management, protection of LP rights, and information disclosure—remain largely consistent for investments in buyout and similar funds, the structure and content of the clauses are not necessarily identical due to differences in investment strategies.
- The purpose of this Model Term Sheet is to outline key contractual terms and conditions. The absence herein of any particular provisions does not imply that JIC considers them unnecessary. Furthermore, given the environment surrounding VC investments and market trends, it may be necessary to modify the contractual terms set forth in this Model Term Sheet or introduce new contractual terms.
- This Model Term Sheet may be revised or updated without prior notice to reflect actual practices, etc. When reviewing the content, please refer to the latest version available on JIC’s website.
- Please note that this Model Term Sheet intentionally omits any reference to tax-related matters. This is based on the understanding that tax treatment depends on an investor’s individual attributes and circumstances, and therefore should be considered on a case-bycase basis.
- GPs intending to seek investment from JIC are encouraged to prepare an LPA aligned to the principles of this Model Term Sheet in advance.
