The Fund is Japan’s first full-fledged secondary fund to acquire (make secondary investments in) interests in PE funds held by existing investors. It is also a globally innovative type of investment fund, because it focuses exclusively on investment opportunities in the fast-growing Asian region, including China, India, Southeast Asia and Australia.
AIC is to be responsible for managing the Fund. DBJ has made a significant commitment to the Fund as its largest investor. Together with investments from Mitsubishi Corporation (Ken Kobayashi, President and CEO) and Sumitomo Mitsui Banking Corporation (Takeshi Kunibe, President and CEO; hereafter “SMBC”), as well as efforts to raise funds from institutional investors in Japan and abroad, the goal is to increase the size of the Fund to around $150 million.
(Note) PE funds invest primarily in shares of unlisted companies. After raising their enterprise value by assisting with their growth or restructuring, PE funds exit from their investments through initial public offerings (IPOs) or by selling such stakes in companies to other firms.
Tighter capital adequacy regulations on financial institutions are expected to lead to an increasingly stronger need for financial institutions to sell off their holdings of interest in PE funds. In this climate, the Fund plans to purchase such interests, which are to be held to maturity, in principle. Through these purchases, the Fund will strive to revitalize the financial and capital markets, mainly by providing solutions to investors in Japan and enhancing the liquidity of the PE market.
For its investors, the Fund will ensure transparency with respect to investee funds by rapidly executing secondary investments. At the same time, the Fund aims to rapidly recoup investment by acquiring interest in PE funds that already have equity stakes in portfolio companies.
Through the management and administration of this Fund, AIC intends to fulfill the medium and long-term investment needs of pension funds, financial institutions and other investors by providing new investment opportunities in the field of PE funds. DBJ plans to continue to actively support new initiatives in the PE market. This support will include ongoing assistance with funding and expertise.
About Alternative Investment Capital Limited
Fund Overview
Fund Schematic (planned)
Contact
Portfolio Investment Group
Development Bank of Japan Inc.
Tel: 81-3-3244-1145