JIC establishes JIC Capital, Ltd.

・Createsnew industries to realize Society 5.0 and promotes business consolidation toenhance international competitiveness
・Suppliesrisk capital to establish next-generation social infrastructure for promotingdigital transformation
・Nurturesthe development of investment professionals to deliver JIC PE’s mission

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Tokyo, September 9, 2020 – Japan Investment Corporation (“JIC”) hasannounced its decision to establish JIC Private Equity (“JIC PE”), anauthorized fund under JIC’s umbrella, and today has filed an application toregister JIC PE’s fund management company JIC Capital, Ltd.

JIC aims to generate a virtuous cycle of risk capital to supportnext-generation industries in Japan. To achieve this vision, JIC promotes openinnovation as a means of supporting growth and enhancing internationalcompetitiveness of businesses. JIC approaches these challenges by stimulatingprivate sector investments in open innovation together with JIC’s owninvestment while fostering the development of investment professionals.
JIC establishes funds under its umbrella and through these funds invests insectors that meet policy objectives. JIC PE is an authorized fund that willfocus on “investments in emerging sectors” that lead to the creation of newindustries, and “investments in maturing sectors” for large-scale businessconsolidation. It will promptly begin investment activities once registrationis complete.

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Overview of JIC PE:

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１．Background of JIC PE’s establishment

While there are numerous private equityfunds that focus on Japanese companies, the supply of risk capital towardsenhancing industrial competitiveness in Japan remains limited from themedium-to long-term and industry policy perspective. In this context, investments in both “emerging sectors” thatlead to the creation of new industries, and “maturing sectors” for large-scalebusiness consolidation are essential across all industries.

However, investments in “emerging sectors”in Japan  face high psychologicalbarriers, which stem from the need to secure large amounts of capital and to entera different industry. Investments in “maturing sectors” face risk and financingrelated hurdles that are associated with large-scale acquisitions. In order toresolve these structural issues, a supply of large-scale, medium- to long-termrisk capital that complements investments from private companies and financialinstitutions is indispensable.

Risk capital is also needed to promote digitaltransformation (DX), to realize a sustainable society, and to capture overseasmarkets, responding to challenges common across industries, such as changes in thecompetitive market environment and social issues.

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２．JIC PE’s mission

JIC PE aims to achieve both a financial return and policy objectives ofcreating new businesses and new industries to realize Society 5.0, enhancing theinternational competitiveness of Japanese industries, and structural reform of industriesthrough the supply of large-scale, long-term, neutral capital. In addition, JICPE will strive to nurture the development of a new generation of investmentprofessionals to manage these activities.

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３．Outline of JIC PE

（１）Fund size

JIC will make a JPY 200 billion LP investmentin the fund established as JIC PE (JIC PEF1 Limited Partnership (“PEF1”)). 　　　　　

In addition, JIC PEFJ1 Limited Partnership(“PEFJ1”) will be established for joint investments with JIC, as engaging in large-scaleindustry reorganization to strengthen international competitiveness is expectedto result in larger deal sizes. JIC commits to a JPY 200 billion LP investmentinto PEFJ1. 　　　　　　　　　　　　

 

（２）Overview of PEF1

・General Partner(GP)：
JIC Capital, Ltd. (JIC Capital)

・Limited Partners(LP)：
Japan Investment Corporation (JIC)
PEF1 Officers and Employees Investment Limited Partnership (“PEF1 OEILP”)

*JIC Private Equity (JIC PE) is acollective term for JIC Capital, PEF1, PEFJ1, and PEF1 OEILP.

 

（３）Term and investment period

In principle, the fund’s term is 10 years,and the investment period is 5 years from its establishment.

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（４）Investment strategy

Aim to make investments that have socialimpact, such as creating new businesses and industries to realize Society 5.0and consolidating and strengthening the international competitiveness ofJapanese industries.

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Ⅰ. Buyout investment

Seek to reform industrial structures and strengthen internationalcompetitiveness through integration and consolidation of domestic and overseascompanies.

 

Ⅱ. Growth investment

Strive to create Japanese global leaders and enhance international competitivenessby investing in high-growth companies in Japan and overseas.

 

Ⅲ. Investment in next-generation social infrastructure

Make investments to build new socialinfrastructure such as communications and renewable energy, where risk capitalis insufficient.

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4．JIC PE’smanagement structure

PEF1 is operated by the GP, JIC Capital.

■ Company name:  JIC Capital, Ltd.
■ Shareholder:        JIC 100%
■ Established:         September 9, 2020 (assuming completion of registration)
■ Business outline:
・Management of PEF1 (buyout investments, growth investments, etc.)
・Monitoring portfolio companies (value-add through PMI activities, promotingalliance between companies, etc.)
・Nurture investmentprofessionals, including management of portfolio companies

■ RepresentativeDirector, President, and CEO   Shogo Ikeuchi
■ Member of the Board    Toshiyuki Kumura (JIC Memberof the Board)
■ Member of the Board    Takuya Fukumoto (JIC Memberof the Board)
■ Member of the Board    Shinichiro Suzuki

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Profile: ShogoIkeuchi

Graduated from Kyoto University GraduateSchool of Engineering

1988: Recruit Co., Ltd. (currently RecruitHoldings Co., Ltd.)

2005: (as above) Corporate ExecutiveOfficer in charge of Corporate Planning and Corporate Strategy

2012: (as above) Board Director andCorporate Executive Officer

2013: (as above) Board Director andManaging Corporate Executive Officer

2016: (as above) Board Director and SeniorExecutive Officer

2020: (as above) Advisor  (current position)

 

Other positions and memberships:

Outside Director, Sony Financial HoldingsInc.

Outside Director, AnyMind Group

Member, Cabinet Office Structural Reform EvaluationReport Task Force

Member, Ministry of Economy, Trade and IndustryHR Management Study Group for Strengthening Management Competitiveness, etc.

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JIC was established with the aim of creating a virtuouscycle of risk capital to support next-generation industries by providingfunding to help companies grow through open innovation while creatingindustries and strengthening competitiveness. JIC put in place a new managementstructure in December 2019, and in July 2020 established JIC Venture GrowthInvestments (JIC VGI) to invest in ventures and growth areas. Now, with theestablishment of JIC PE targeting large-scale growth and buyout investments, thesetwo funds established under JIC’s initiatives will begin full-scale operations.

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(Reference) JIC's investment strategy

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About Japan Investment Corporation (JIC)

Japan InvestmentCorporation (“JIC”) was established on September 25, 2018. Amid the accelerateduse of IoT, Big Data, AI, and other new information technologies globally, JICaims to address the growing demand for risk capital for long-term, large-scalegrowth investments with a governance structure conducive to quick and flexibleinvestment decision making.

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