DBJ investment in Next Rise Social Impact Fund
Development Bank of Japan Inc. (DBJ) has signed an agreement to invest in Next Rise Social Impact Fund (the "Fund"), a fund that invests in social impact bonds "SIBs)*1 newly launched by Dream Incubator Inc. (DI; CEO Takayuki Miyake). This fund is the first SIB-specific fund in Japan.
DBJ considers that Pay-for-Success (PFS) and SIBs are important methods that contribute to solve social issues by public-private cooperation. Through domestic and overseas market research and other activities, DBJ has built a network with concerned persons in the SIB market such as government, local governments, intermediate support organizations, private service providers, and financial institutions. Furthermore, in November 2019, DBJ invested in Bridges Fund Management Limited*2 ("Bridges"), an SIB-specific fund in the UK, and signed an agreement for a strategic partnership with Bridges. Through the relationship with Bridges, DBJ has acquired advanced SIB knowledge.
DI promotes activities to solve various social issues in addition to carrying out strategic consulting for large companies and investment in venture funds. DI has experiences of advanced projects with ministries, local governments, and many private companies, playing a central role in the formation of the Fund.
DBJ evaluates its role in this case as the supply of risk money for DI's efforts to improve the quality of local government services and reduce financial burden by forming this SIB-specific fund, the first of its kind in Japan. Moreover, since investment in the Fund can be expected to expand the SIB market in Japan, DBJ has decided to do so through its Special Investment Operations.*3
DBJ will continue to not only contribute to the revitalization of Japan through PFS and SIBs, leveraging its diverse project funding and other knowledge, but also support development of solutions to social issues faced in regions throughout Japan.
*1 Social impact bond: A contract whereby a public sector or governing authority pays for better social outcomes in certain areas and passes on part of the savings achieved to investors. It is positioned as one of the public-private partnership methods that combines the utilization of private funds.
*2 Bridges Fund Management Limited: The UK's largest fund management company specializing in "social impact investment" that aims to achieve both economic return and social impact creation, established in 2002. It performs investment, fund management, and consulting services for projects that generate sustainable growth and social impact, such as social impact bonds.
*3 Special Investment Operations are designed to encourage private-sector institutions to supply growth capital. The supply of growth capital is implemented intensively but temporarily from the perspective of strengthening Japanese companies' competitiveness and revitalizing local communities.
Inquiries:
Structured Finance Department
+81-3-3244-1590
Business Planning and Coordination Department, Innovation Promotion Office
+81-3-6311-5048