Medium-Term Management Planfrom FY March 2025 to FY March 2027

Japan Asia Investment Co., Ltd.
August 14, 2024

© Japan Asia Investment Co., Ltd. 2024

-1-

Table of Contents
 Basic Policy
・・・ P.3–6
 Action to Implement Management That Is
・・・ P.7
Conscious of Cost of Capital and Stock Price Business Policy
・・・ P.8
 Business Portfolio
・・・ P.9
 Business Strategy
・・・ P.10–13
 KPIs by Business・・・ P.14
 Revenue Models by Business・・・ P.15
 Financial Strategy
・・・ P.16–17
 Numerical Plan
・・・ P.18–19

Note: The figures in this document are based on a consolidated basis(previous accounting standard applied) unless otherwise noted.

© Japan Asia Investment Co., Ltd. 2024-2-

Basic Policy (External Environment Analysis)
Macro Environment＜Ｐ＞ Politics＜Ｅ＞ Economics

Geopolitical risk

Risk of rising interest rates

Military conflagration and segregation ofinternational society due to hegemonism
Economic security, Taiwan situation becoming severe

End of ultra low-interest-rate policy, rising long-term
interest rates

U.S.-China relations

External Environment

Intensification and prolongation of the U.S.-China
confrontation affecting the world economy
Trade friction, supply chain problems

Rise in fund procurement costs, decline in risk tolerancelevel

FX risk
Rise in energy/raw materials costs as yen depreciates
Higher inflation rate level in normal times
Capital outflow as domestic asset prices decline＜Ｓ＞ Society＜Ｔ＞ Technology

Climate change risk

Changes in business models due to techinnovation

Increase in natural disasters and increase of burdens forresponse costs

Low birthrate, aging population, anddecreasing population
Stagnation in economic activities due to shortage in labor
force
Concentration in urban areas and shrinking regional
economies

Changes in service/business models due to evolving
generative AI
Improving labor productivity due to advancing DX

Tech innovation as decarbonization advances
Spread of new technology and advancing tech innovation inline with response to decarbonization

Changes in lifestyle
Personal values and workstyles becoming more diverse

Micro Environment
VC industry entering the phase of maturity
Competition in VC industry growing harsher
Given that VCs and CVCs are so popular now, it is
becoming increasingly difficult for any VCs to ensure
differentiation and secure investment opportunities
for promising startups.

© Japan Asia Investment Co., Ltd. 2024

Investment funds flowing to Japan from abroad
Overseas investment money from those seeking
investment opportunities in Japan
Overseas investment money (such as that from Asia
and China) from those seeking investment
opportunities in Japan such as promising tech, startup
companies, and listed companies-3-Basic Policy (Long-Term Vision)
Management Philosophy
Long-Term
VisionAs an investment company that links Japan with the rest of the Asian region, we are committed tocontributing to the creation of a safer, stabler and more efficient future society under the circumstancesof structural problems caused by the declining birthrate and increasing aging population.

Initiatives for Sustainability
Based on our core value of being an SDGs investment company, we make efforts towards theachievement of a sustainable society through ensuring that our investment activities comply
with the Management Philosophy.

Environment

Materiality

 Make efforts to reduce
environmental impact andtackle the climate change
problem through investment.
 Provide support to startup
companies that innovate fora circular society.

SocialGovernance Pursue initiatives to solve issues
related to a low birthrate and aging
population, and establish an inclusive
society through investment.

 Build a sound organizationalbase.
 Ensure thorough compliance.

 Contribute to the growth of local
societies and regional economies
through collaboration with local
financial institutions collaborating on
specific projects.
 Improve the workplace environment toenable highly motivated work throughrespecting human rights and ensuring
diversity.

 Strengthen the risk management
system and information security.
 Ensure proper information
disclosure and promoteadequate dialogues withstakeholders.

Investment
Areas

As an investment company that solves social issues
Health Care

Distribution
CenterPrivate Equity
Investment

Smart Agriculture

Renewable
EnergyFundAdministration© Japan Asia Investment Co., Ltd. 2024

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Basic Policy (Governance)
Strengthen governance system
To present

In the future Authorities were overly concentrated to therepresentative director.
 Separation between the BOD’s supervisory
function and operational execution was
insufficient.

Investment Committee,
Management Committee
 The Investment Committee andManagement Committee will be
reorganized, with the CIO and COO
respectively serving as their chair,starting now.
 In the new system, unanimous
support will be required for any
agenda, and each member will have toassume the responsibilities in theirrespective positions.

 Disperse chairpersons for decision-making meetings,
clarify the locus of authorities and responsibilities.

Organizational
reform Ensure that directors perform supervisory functions,and that executive officers, CxO for each position,
perform operational execution.

Board of Directors (BOD)

Organizational system

 Directors will be appointed from both
the Middle-office Unit and the Backoffice Unit, to enable the BOD tosupervise operational execution fromthe viewpoint of optimizing the whole
company under the representative
director, who is versed in all aspects ofinvestment operation.

 The Front Business Unit will be
reorganized into the Investment
Group by integrating the Investment& Development Group and Business
Solution Group.

 Operational execution will be carriedout by executive officers. The CEO,COO, CFO, CIO will be properly
appointed, in addition to the officers
responsible for respective units.

Risk management

 The Business Strategy Office will be
newly established in the Middle
Business Unit as the control tower for
promoting business strategy.

Human capital / HR system＜Using human capital＞• Expand the business domains through using the HR of
Middle-office Unit and Back-office Unit.

＜Risk Management Committee＞• Identify, assess, and analyze risk factors inside andoutside the company.
Tackle sustainability issues, including human capital anddiversity.

•＜Our code of conduct＞• Ensure legal compliance and prevent various forms ofharassment.

Allow various workstyles and improve the HR system toenable each person to perform at their best using theirpersonality and skills irrespective of gender, age, andnationality.

•＜Compliance＞• External whistle-blowing system (consultation system
where a contact point is established inside an external
law firm)

Employ senior personnel through expanding the reemployment system and extending the retirement age.

＜Compensation system＞• Prioritize performance in the compensation system andreview the incentive compensation system.

© Japan Asia Investment Co., Ltd. 2024

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Basic Policy (Risks and Opportunities)
Rebuild the corporate identity and strengthen competitive
advantage using features specific to JAIC.
Investment Development
Business

Theme
Marketenvironment

Investment Management
Business＃Energy (power storage site, renewableenergy)＃Infrastructure (logistics warehouses, GHs
for people with disabilities)＃Venture capital companies

•

•

•

Energy: Following soaring prices due toclimate change, etc., needs for stableenergy supplies have risen.
GHs for people with disabilities: About
7.6% of the national residents in Japan
have a disability. On the other hand, thenumber of group homes is not sufficient.

Corecompetence•

Logistics warehouses: Given the growing
EC market, demand for logistics
warehouses will grow, but with a smaller
growth rate vs. the last 10 years.
•

Track records on investment development andaccumulated know-how through collaboration
with external companies and financial
institutions, concerning each investment area

Risks

Countermeasures•

Changes in financial environment such asincrease in interest rates, etc.

•

Increase in costs due to inflation•

Deterioration in business environment due
to tightening regulations and institutionalchanges

Ensure “select and disperse” for businessportfolios. Create a system that enables
reviews of priority areas.

© Japan Asia Investment Co., Ltd. 2024

＃ Contract service provider for fundoperation＃Buyout (listed, unlisted)••

Fund Platform Business•16 MBOs were closed among domestic listedcompanies in 2023—the highest since 2021, when
we saw 19 MBO deals. In terms of aggregate value,
over 1.1 trillion yen was recorded in 2023, a
historic high.
In the 1H of 2024, there were 467 M&As forbusiness succession, a 45.5% increase vs. the 1Hof 2023 (321 deals). This 467 was anotherhistoric high for a half-year period.
The annual aggregate amount of VC funds
structured in Japan has shown an increasing trend
since FY 2018, when excluding special factors. In
FY2023, 48 VC funds were formed, totaling 378.7
billion yen.

•High recognition in overseas markets as aninvestment company that connects Japanand Asia. Status and credibility as a listedcompany in Japan
Collaborate with overseas VCs andaccelerators, and network with domestic
listed companies

Differentiation against accounting firms that

There are not many businesses that arededicated to fund operation as acontractor. Accounting firms are our maincompetitors.

•

VC fund formation now shows anincreasing trend. Therefore, there are highoutsourcing needs for middle-office andback-office operations among such funds.

specialize in accounting, thanks to the ability
to provide services including middle-office
operation to customers through sharing theexperience and know-how of JAIC for fundmanagement

Competition to secure deals against peers,
decrease in number of projects that meetinvestment criteria, a deteriorated economy,
decline in needs of (overseas) investors due
to geopolitical risks and natural disaster risks,loss occurrence due to changes in market
price, etc.

•

Drain of fund accounting HR•

Appearance of service providers of equallevel through utilization of AI, etc.

Ensure “select and concentrate” forinvestment portfolios. Develop investment
methods unique to our company.

Hire and train HR. Pursue businesscollaboration with accounting firms.
Effectively use AI/DX.

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Action to Implement Management That Is Conscious of
Cost of Capital and Stock Price

Analysis of
the current
situation

Goal

PBR has continued to be below 1.
Low return on investment and low asset turnover rate are the causes.
FY

Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022 Mar. 2023 Mar. 2024

PBR

0.41

0.36

0.53

0.41

0.53

0.68

ROE（％）

8.7

4.9

0.5

0.3

deficitdeficit

PER

5.9

9.1

142.3

200.9

deficitdeficit

ROA（％）

2.00

1.20

0.13

0.09

deficitdeficitTo improve PBR
Achieve ROE that matches the capital cost (about 13.4％).
① Expand stable revenue. (Cover the fixed costs by fee income to keep recording profits.
Reduce capital cost.)② Improve profitability. (Replace assets through collecting long-lived assets early.
Improve the asset turnover rate and review asset allocation and business portfolio.
Improve profitability.)③ Achieve refinancing and improve financial leverage.
④ Update IR activities.

Key Performance Indicators (KPI)

Plans andtargets

Increase in AUM in the Investment & Development
Business
Increase in AUM in the Investment Management
Business
AUA Balance of Fund Platform Business© Japan Asia Investment Co., Ltd. 2024

Mar. 2027\ 15 bn\ 30 bn\400 bn

Key Goal Indicators (KGI)
Mar. 2024

Mar. 2027

Goal

Stable Earnings\0.2 bn\0.8 bn\1.08 bn

ROE

deficit

Net income
attributable toowners of parent(\１.６) bn➡

12.7%\1.0 bn➡

More than 13.4% of
the cost of capital
Consolidation of
profitability and increasein one-time earnings-7-Business Policy
Redefine the conventional business areas and expand the businessbased on a new business policy.
Ideal state for JAIC
① Investment② Investment

Development Business Management BusinessCurrent JAIC
PrivateProjectEquity
oriented
investment investment
Fund operation service
as a contractor③ Fund Platform BusinessNew business policy① Investment Development Business
Ensure the pipeline development for
private real assets and accumulate
investment assets toward securing stablerevenue and adequate fund structuring.

② Investment Management Business
Provide asset management service andfinancial products per the investment
methods using the strengths of JAIC,
targeting institutional investors, family
offices and the wealthy class whether
domestic or overseas, in both thetraditional asset class and non-traditional
asset class.

③ Fund Platform BusinessAs a contractor, secure outsourced
operations necessary for fund structuring,
recruitment, and asset management from
VCs/CVCs.

© Japan Asia Investment Co., Ltd. 2024

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Business Portfolio
Sort out external environmental factors and earning opportunities, build a businessportfolio that can be supplemented or replaced; and develop and manage investment
assets/financial products that can respond to various economic environments.
② Investment Management
Business① Investment Development Business
1. Business opportunities forprivate real assets

Private real assets that have inflationhedging features and defensive features
could be strong diversified investment
targets for investors. They also could
contribute to achieving responsible
investment goals.

Inflation rate (interest rate)
High
EnergyTraditional assets

Power storage site,
renewable energy

Listed stocks,
corporate bonds, etc.

Low

Outsourced
fund
operation

Infrastructure
Logistics warehouses

Healthcare

2. Investment policy for private
real assets

GH for people withdisabilities Move in line with inflationary trends
or secure stable cash flow.
 Improve capital efficiency by using
external funds (leverage).
 Accumulate investment assets to
expand to fund business (toachieve fee business as AssetManager).

© Japan Asia Investment Co., Ltd. 2024

High

Non-traditional
assets(Alternative)
PE fund, buyout of astartup company

Low③ Fund Platform
Business

Economic growth Inflationary pressure from soaring
energy prices and shortage of laborforce Uncertainties continue around rises ininterest rates and the economy ingeneral Traditional asset management
 Hedge fund Buyout (TOB, MBO, MEBO) PIPEs
Launch new funds based oninvestment methods that use thestrengths of JAIC to meet theneeds of overseas investors.
Collaborate with overseas VCs andaccelerators. Domestically, focus
on companies related toinvestment development businessfor real assets, tech/DX, overseas
deployment, inbound tourism, etc.

 Venture capital companies
 Business vitalization, distressed Buyout, buyout of a startup

Business succession funds are being managed now,
through a JV (AJC) with Aozora Bank.

Provide contractor service for
middle-office and back-office
operations for managing a fund

In cases of buyout of a startup company, adetermined portion or more of the shares of thestartup company are purchased to get involved in thecorporate management and to ensure the increase inenterprise value through hands-on involvement.

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Business Strategy
Real asset investment

Investment Development BusinessPrimarily based on debt borrowings or equity procurement throughlaunching investment funds, accumulate private real assets that haveinflation-hedging features or defensive features.
Business situation

Businessfeatures

Executed investment for 46 projects, mainly mega
solar (220 MW cumulative). Sold or recovered 34
projects/192 MW.
Executed an investment in a NON-FIT type biomass
power plant using waste as fuel, and supplying thegenerated power to fuel suppliers.
Aiming to expand the investment target scope toadjacent areas leveraging our know-how, now
considering investing in batteries.

Private real
assets having
inflationhedging
features

Investment was made for 23 locations as of March
2024, and operations have already started at 14 ofthem.
We planned to sell 16 properties to a private
placement fund using social project bonds that wereformed by our company as its sponsor.

Private real
assets having
defensivefeatures

Since March 2020, we started to invest in a series offacilities located in the Tokyo metropolitan suburban
areas.
Construction for one property in Tokyo (Akiruno City),
two properties in Saitama Prefecture (Koshigaya City,
Hidaka City), and one property in Kanagawa
Prefecture (Atsugi City) were completed, of which
three properties have already been sold.

Private real
assets having
defensivefeaturesBusiness type

RenewableenergyHealthcare(GHs for people
with disabilities)







Infrastructure(logistics
warehouses)© Japan Asia Investment Co., Ltd. 2024

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Business Strategy
Investment Management Business

PIPEs fund/Buyout fund

Provide not only financial products, but also exclusive investment
services to domestic investors as well as overseas investors (businesscompanies) that face difficulties accessing the Japanese market.


Cases where JAIC selects investee areas and companies and explores an investment target
company; then recruits multiple investors to form a private equity fund; and serves as thegeneral partner (GP) for the fundCases where JAIC carries out sourcing, execution, value-up, and exit on behalf of theinvestors, on the premise that mainly unit investors and/or business companies will
become co-investors or limited partners (LPs) (See chart below)

A cycle of fund investment
Research forinvestment

Exploreinvestment target
companies

DD, negotiation,
conclude theagreement

Raise EV ofinvestment
targetcompanies

Executeinvestment

Sourcing
Prior consultation, determine
investment policy, selectinvestment target areas,
listed companies(PIPEs/MBO/TOB)
unlisted companies (buyout )Prepare for fund establishment,
formulate finance scheme, negotiatewith financial institutions, formulate
investment plan, prepare contractual
documents, etc.

Select investee candidates,
negotiation for acquisition orequity investment, pre-DD© Japan Asia Investment Co., Ltd. 2024

Exit of theinvestee

Collaboration between investing
company and investment target
company, implement value-up
plan, monitor

Fund launch, provide
guidance to value-up team,formulate value-up plan
involving experts

Select candidate buyers,
negotiation, implement theexit- 11 -

Business Strategy
Investment Management Business

M&A fund/RBO

Growth challenges for domestic SMEs
Promote overseas deployment, expand sales
revenue from overseas and non-Japanese

Improve labor productivity and secure HR
for corporate management(Robotics, DX, AI, etc.)

Re-branding, PR, marketing

Solutions provided by JAIC
Support for overseas deployment centered on
Asia and China


Seasoned support know-how accumulated at a
subsidiary (Asian Market Planning)

As an equity investor for funds, we proactively recruit
overseas investors and build a system that enables
overseas investors to provide hands-on support.

Structuring a venture fund that contributes tothe value-up of investees

Based on our Management Philosophy, we provide theinvestment target companies for the fund with thesupport to enable them to overcome their growth
challenges through collaboration.

Support for formulating M&A strategies,
cultivating a project, and executing investment

M&A fundTo help domestic medium-sized companies and startups growthrough M&As, we implement sourcing for eligible investees,
set up a private equity fund for each investment target, raise
funds from external entities, and perform execution in linewith their growth strategy.

RBO (Regional Buyout)
In this scheme, mainly on behalf of local companies that face
unstable shareholder composition, fragile financial conditions,and a shrinking trade territory (market) due to the lowbirthrate/aging population, etc., we proceed with smoothdelisting steps while protecting each company’s business
continuity and consistency in corporate management, throughsifting local large companies, the upper management members,
employees, the founder family, etc., to locate an exit
destination.
“RBO,” which means to ensure a buyout in the region, by theregion and for the region, is proposed as a fund scheme
unique to our company.

Buyout of a startup company
Through purchasing a determined portion or more of
the shares of each target startup company, we getinvolved in its corporate management and aim to help
raise its enterprise value through hands-on support.

 Our people with proven track records in fundmanagement help investees formulate M&A strategies,
cultivate new projects, and pursue investment execution.

© Japan Asia Investment Co., Ltd. 2024

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Business Strategy
Fund Platform BusinessAccounting operation for the fund/JBS

JAIC Business Service KK (JBS) holds a long-standing track record as a fundadministrator and provides customers with solutions for the middle- andback-office fund operations.
Solutions provided by JBS

Initiatives toward business expansion

Founded more than 20 years ago, JBS has been providing externalcustomers with contract operational service, leveraging the skills
and experience that have been accumulated over a long time as the
back-office unit for the funds managed by the JAIC Group.

Expand customer base throughcollaboration with external accounting firms

Accounting operation for the fundCreate fund business reports and financial reports, calculate successfees and dividends, interact with audit firm in times of accounting audit,
etc.

Monetization for fund accounting systemthat we have developed
Rebranding, PR

Management of fund assets and proxy service for general
operations


Cover such operations as opening of deposit accounts for the fund,procedures for crediting/debiting funds, procedures for foreign
remittances, opening and managing securities transaction accounts, etc.
 Cover such operations as making of seals, etc., for the fund, seal
placement for proxy letter, etc., creation and delivery of documents andcertificates to each equity investor in the fund (LP), etc.

Support for fund operator (GP) duties
 Provide accurate advice and support based on the JAIC Group’s
operational experience as GP.
 Provide support for: the establishment and liquidation of a fund,responding to inquiries from LPs concerning accounting, conducting
procedures for transfer of LP position or withdrawal, creation of legally
mandated reports, etc.

© Japan Asia Investment Co., Ltd. 2024

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KPIs by Business① Investment Development Business
¥5
bn

¥10
bn

¥15
bn

Mar. 2025

Mar. 2026

Mar. 2027

Investment gains from Projects(\60) M

\30 M

\80 M

Captail gains of Projects\1,070 M\370 M\970 M

ＡＵＭ
ＡＵＭ：Asset Under Management
The amount of AUM is only for the newincrease.
Investment gains and capital gains are
based on gross profit.

② Investment Management Business
ＡＵＭ

¥10
bn

¥20
bn

¥30
bn

Mar. 2025

Mar. 2026

Mar. 2027

Asset Management Fees

\20 M

\430 M\640 M

Capital gains of Private Equity\870 M\710 M\480 M

¥350
bn

¥400
bn

Mar. 2025

Mar. 2026

Mar. 2027\140 M\160 M\180 M

ＡＵＭ：Asset Under Management
The amount of AUM is only for the newincrease.
Asset management fees and capital gains
are based on gross profit.

③ Fund Platform Business
ＡＵＡ/Number of funds
ＡＵＡ：Asset Under Administration
The amount of AUA is the balance including
the existing balance.
The administrative commission fee is theamount of sales (almost the same amountas gross profit).

Administrative conssession fees

© Japan Asia Investment Co., Ltd. 2024

¥300
bn ／70／80／75- 14 -

Revenue Models by Business (Ideal State)
Targeted revenue from increase in
AUM/AUA① Investment Development Business

Targeted revenue

AUM
¥15 B

GP commitment
Assumed IRR
AM fees
Cycle period
CG (our company’s equity)

：
：
：
：
：

¥3 billion (＝AUM×20%)
7% (multiple 1.3×)¥15 billion×2% ＝ ¥300 million
Four years¥3 billion×30% ＝ ¥900 million(Of which) Stablerevenue(Of which) One-timerevenue¥300 million ¥300 million¥900 million¥900 million② Investment Management Business
Targeted revenue

AUM
¥30 B

GP commitment
Assumed IRR
AM feesCarry
CG (our company’s equity)

：
：
：
：
：

¥1 billion (＝AUM×3.3%)
15％¥30 billion×2% ＝ ¥600 million
20% → ¥30 billion×15%×20% = ¥900 million¥1 billion×15%×80% ＝ ¥120 million(Of which) Stablerevenue(Of which) One-timerevenue¥600 million ¥600 million¥900 million¥900 million¥120 million¥120 million③ Fund Platform Business

AUA*¥400 BFY Mar. 2024
Number of contracts underasset management：
ＡＵＡ：
Asset manager fees ：64¥263 billion¥130 million

Targeted revenue78→ ¥400 billion¥180 million(Of which) Stablerevenue(Of which) One-timerevenue¥180 million ¥180 million*ＡＵＡ：Asset Under Administration
Total¥1.08 billion© Japan Asia Investment Co., Ltd. 2024

Total

¥1.92
billion- 15 -

Financial Strategy (Expansion of AUM)
Curb and compress investments by our own funds. On the other hand,increase AUM in the investment development business and theinvestment management business to increase revenue. Through it,
expand equity capital and reduce debt.

Medium-Term Management Plan

© Japan Asia Investment Co., Ltd. 2024

- 16 -

Financial Strategy (Net Debt Zero)
Through making investments using external funds, curb and compress
investments by our own funds to improve the cash/deposits position.
At the same time, conduct non-consolidated debt repayments in linewith agreements to achieve net debt zero at an early timing.

Cash
Bank
debt

Cash &
depositsof JAICBank
debt

Medium-Term Management Plan

© Japan Asia Investment Co., Ltd. 2024

- 17 -

Numerical Plan
Achieve a performance recovery through expanding stablerevenue and improving investment revenue. For FY March 2027,
aim to achieve one billion yen in profit attributable to owners ofparent.

Medium-Term Management Plan

© Japan Asia Investment Co., Ltd. 2024

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Numerical Plan (By Business)
In FY March 2026, profits will decline temporarily due to adecrease in capital gains from projects. However, in FY March
2027, both revenue and profits will increase due to executed
investments planned for the period.
Actual（Unit：\ million）

Mar. 2022

Mar. 2023

Plan
Mar. 2025

Mar. 2024

Mar. 2026

Min.

Max.

Mar. 2027

2,409

3,017

964

1,600

2,650

2,450

2,800

Operating gross profit

1,276

961

(427)

1,150

1,850

1,500

2,200

Investment & Development Business

495

365

(229)

1,010

1,010

400

1,050

Investment Management Business

636

457

(346)

0

700

940

970

Fund Platform Business

145

139

147

140

140

160

180

Operating profit

86

(185)

(1,522)

150

850

550

1,250

Ordinary profit

61

(224)

(1,569)

300

1,000

500

1,250

Profit attributable to owners of parent

49

(269)

(1,574)

250

950

400

1,000

By business

Operating revenue© Japan Asia Investment Co., Ltd. 2024

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