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Presentationfor
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決算説明資料JAFCOGroup Co., Ltd.
ジャフコグループ株式会社

April 24, 2024

Contents• Our Goal and Its Feasibility

3• Section 1: Company Overview

4 – 12• Section 2: Basic Plan for Enhancing Corporate Value and Its Feasibility

13 – 25• Section 3: Initiatives for Enhancing Corporate Value

26 – 31

The contents of this document are based on materials available at the time of its compilation and no guarantee can be made as to the continued accuracy and reliability of the material. The contents may
be changed without advance notification. Please note that even if this document contains forward-looking or forecast statements, such statements are not guarantees of future performance, and future
performance may differ from actual results due to changes in the business environment and other factors. The information in this document is for presentational purposes only and is not an inducement toinvest in securities issued by the Company or in private equity funds. JAFCO Group holds all rights to this document with the exception of material taken from other sources, and no part of the document
may be used or reproduced for any purpose whatsoever without prior permission.

Purpose

Our Goal and
Its Feasibility

Fueling perpetual growth; investing in bold visions

Our goal
Basic policy for enhancing
corporate value

Promote growth strategy × Improve capital efficiency

Goal: ROE of 15％-20％

See P15

Target ROE of 15% in the medium term (around 2027) and 20% in the long term (around 2032)

Through our basic policy for enhancing corporate
value, we designate medium- to long-term goals.
We aim to realize our purpose as a uniqueinvestment management company that combines
strengths in venture and buyout investment.

Backed by our more than 50 years of experience,
our continually evolving and robust management
resources, and the market’s growth potential, we
believe that this is an attainable goal.

An investment management company that combines strengths in venture and buyout investment
In venture investment we aim to foster prime Japanese startups; In buyout investment we support regrowth of companies for
succession to next generations. By combining strengths in both areas and enhancing expertise, we will aim to realize an even higher
level of performance.

Achievements andmanagement resources

Market environment
VentureSee P17Growth of the startup market

Track record in private equity
See P20⚫

Startup funding increased tenfold in 10 years⚫

Backed by Startup Development Five-Year Plan, etc.

BuyoutPotential of the businesssuccession and M&A market

See P6

See P18

See P21⚫

M&A deals involving Japanese companies are increasing
and there is high potential⚫

The government has been continually involved in businesssuccession of SMEs⚫

Established first Japanese venture fund (1982)⚫

Pioneered Japanese buyout funds (1998)⚫

Invested in 4,181 companies and managed acumulative total of ¥1.2 trillion of funds

Strong management resources
based on human, intellectual, andsocial capital

See P5

See P25

Section 1: Company Overview

Purpose

Business Endeavors for
Realizing Our PurposeJapan

We began as a pioneer in Japanese venture capital,
consistently investing in bold visions since our
inception.
Since our founding 50 years ago, we have been
consistent in making investments in all
circumstances, fueling perpetual growth.
Currently, we conduct both venture and buyout
investment, boasting an outstanding track recordand a fundraising capability that rank at thehighest level domestically.

Fueling perpetual growth; investing in bold visions

Ventureinvestment

Japan

Buyoutinvestment

US

Ventureinvestment

Asia

Ventureinvestment

Since 1973

Since 1998

Since 1984

Since 1986

Balance of unlisted securities

Balance of unlisted securities

Balance of unlisted securities

Balance of unlisted securities¥101.8 billion¥32.0 billion¥68.8 billion¥31.7 billion

No. of investment professionals

No. of investment professionals

No. of investment professionals

No. of investment professionals

42

19

6

16

Cumulative total offunds managed

Cumulative number of
portfolio companies

GlobalBalance of unlisted securities¥234.3 billion
No. of employees¥1.2 trillion

Total IPOs

4,181 cos. 1,031 cos.

162
*Balances of unlisted securities are as of the end of March 2024. Personnel numbers are as of April 1, 2024.

Combining the strengths of venture and buyout
investment to achieve greater performance• Startups in their founding to growth stages• Make majority investment of a stake of 50% or
more• In addition to conventional buyout, we makegrowth-supportive investment focused on thegrowth of portfolio companies• 3 to 8 years• 3 to 5 years• Primarily aim for exit through IPOs, while also
considering M&A deals

Exit
strategy• Exit strategy considers M&A as well as IPOs

• Aim for returns up to tens of times in size

• Significant volatility due to susceptibility tomarket influences

Expected
returns

By combining the strengths of venture and buyout
investment going forward, we will establish aunique organizational foundation in an aim toachieve an even greater level of performance.

• Lead large-scale financing in early-stage
companies as the lead investor• Companies in their early to mature stages thathave realized earnings

Holding
periodVenture investment can offer high growthpotential, it also comes with high volatility. By
combining it with the stable revenue of buyout
investment, we are stabilizing our operations.

• Make minority investment of a 10-20% stake

Investment
policyOur business comprises of venture investment,
which is our founding business, and buyout
investment, which has become our second pillar.

Buyout investment

Venture investment
Target ofinvestment

Our Two BusinessDomains• Stably aim for returns of about 3 times in size

• Relatively less influenced by the market andvolatility is low

Mitigate market influences and achieve stable operations through a portfolio of differing asset classes

ExitsVentureInvestment Track Record
BuyoutCommit to new business creation and jointly shape
the future

Overseas

Based on this Mission, we have helped entrepreneurs
create various innovative products and services.
We will continue to capture the changing times andtake on the challenge with entrepreneurs to realize asustainable future.

Investments

VentureBuyoutOverseas*Some company logos are as of the time of their sale.

Relationship building and cooperation

Business Model
Limitedpartners

We aim to maximize profits by improving ourinvestment management, fundraising, andorganizational capabilities as well as expanding
our fund size and achieving high returns on
investment (ROI*).

Highly selective,
intensive
investment

ROI*
Distributions

JAFCO invests in unlisted securities by channeling
capital gathered from investors into funds.
Our revenue streams include fund management
fees and success fees from fund operations, and
we also realize capital gains by investing our own
capital into the funds.

Funds

Capitalcommitments

Fund size

Fund
operation
Fundraising andinformation provision

1. Fund management fees
2. Success fees

Investment ofown funds

Investment management
capabilities

Investment
recovery (exit)

Portfolio
companies

Deal sourcing
Management support

3. Capital gains

Fundraisingcapabilities*ROI: Revenue from operational investment securities ÷ Cost of operational investment securities

Organizationalfoundation

1. Fund management fees
• Fixed fees for the management of funds

Three Sources of Income

Limited partners
Capitalcommitments

Fund management fees

• Capital commitments from limited partners*** (AUM) ×
Approx. 2% per annum• Key driver: External capital commitments (AUM)

x

Funds
Fund management

Our income sources are fund management fees
earned as fees relative to the capital commitments
made by our limited partners into our funds,
success fees*, and capital gains derived as returns
from our own investments in the funds.
The key drivers of our growth are the increase of
ROI** (investment management capabilities) andfunding from our limited partners (fundraisingcapabilities).

Limited partners

2. Success fees
• Performance-based compensation for funds• Fund management income × Rate of limited partners’
interests×20%• Key driver: ROI

x

Funds

Investment recovery (exit)

Portfolio companies

Capital gains

3. Capital gains• Investment returns obtained by investing our own capital
into funds• Gain/loss on sale of portfolio shares corresponding to
JAFCO’s interests in funds• Key driver: ROI*** Success fees are recorded once cumulative distributions exceed capitalcommitments.
** ROI: Revenue from operational investment securities ÷ Cost of operational
investment securities

Success fees

Distributions*** Funds entrusted for management by limited partners; The amount subject to fund management fees
excluding investments in ICON.

Funds

Capitalcommitment

Investment recovery (exit)

Portfolio companiesxSustainable Competitive
Advantages
Our strengths are our investment management andfundraising capabilities, supported by ourorganizational foundation.
By continuously strengthening these elements, wefuel perpetual growth while generating profits
based on a stable business foundation andincreasing funds under management.

PurposeFueling perpetual growth; investing in bold visions

Enhancing corporate value
Investment management
capabilities

Fundraising capabilities

Continuously improve investment
performance under our policy of highly
selective, intensive investment

Systematically enhance existing and new
funding for stable increase of the fundsize and external funding

Organizational foundation
Committed contributions by individuals with diverse backgrounds
Increase our ability to reproduce success by systematizing
knowledge sharing and organizational, seamless support of portfolio
companies2024
Financial Highlights

Total net sales

24.4 billion

Net income

7.5 billion

Fundmanagement fees

Capital commitments(AUM) / External capitalcommitments*

4.8 billion 465.6 billion
194.9 billion

Net sales amounted to ¥24.4 billion(yoy increase of 74%), ordinary
income to ¥8.8 billion, and net
income to ¥7.5 billion (yoydecrease of 82%).
Due to new fundraising, fundmanagement fees increased toOrdinary income
Ordinary income

8.8 billion

ROE

Admin. expense
coverage

5.6%

110%

¥4.8 billion from the previous
period’s ¥3.4 billion, a level thatcan cover SG&A expenses (excl.
business tax).

* Funds entrusted for management by limited partners; The amount subject to fund management fees
excluding investments in ICON.
** Admin. expense coverage ＝ Management fees / SG&A expenses excl. business tax

Average exit multiple(5 yrs average)

2.3x

2024
Numerical Highlights
for Venture andBuyout Investment
Capital gains (listed and unlisted)

Revenue fromoperational investment
securities

VC

BO

BO

60%

67%

22%

31%

6 cos.

billion40%

33%

Gain on sale

Exits* (domestic)

VC

78%

69%

Fund size (most recent)

¥7.9
BO

BO

20%

34%

20 cos.

billion64%

capital gains.

VC

BO

There were 6 domestic IPOs (2 forinvestment contributed significantly to

VC(listed and unlisted)

36%

In this period, exits from buyout

61

¥50.6

BO

billionbillion in the preceding fiscal year.

Number of investment
professionals(unlisted)

¥19.0
BO

Balance of operational
investment securities

VC

amounted to ¥7.9 billion compared to ¥3.7

buyout).

IPOs (domestic)*The number of exits by sale of all owned shares or by IPO.

¥97.8
VC

80%

billion

VC

66%

Section 2: Basic Plan for Enhancing Corporate Value and Its Feasibility

Purpose

Fueling perpetual growth; investing in bold visions

RepeatOur Goal and
Its Feasibility

Our goal
Basic policy for enhancing
corporate value

Promote growth strategy × Improve capital efficiency

Goal: ROE of 15％-20％

See P15

Target ROE of 15% in the medium term (around 2027) and 20% in the long term (around 2032)

Through our basic policy for enhancing corporate
value, we designate medium- to long-term goals.
We aim to realize our purpose as a uniqueinvestment management company that combines
strengths in venture and buyout investment.

Backed by our more than 50 years of experience,
our continually evolving and robust management
resources, and the market’s growth potential, we
strongly believe in the attainability of our goal.

An investment management company that combines strengths in venture and buyout investment
In venture investment we aim to foster prime Japanese startups; In buyout investment we support regrowth of companies for
succession to next generations. By combining strengths in both areas and enhancing expertise, we will aim to realize an even higher
level of performance.

Achievements andmanagement resources

Market environment
VentureSee P17Growth of the startup market

Track record in private equity
See P20⚫

Startup funding increased tenfold in 10 years⚫

Backed by Startup Development Five-Year Plan, etc.

BuyoutPotential of the businesssuccession and M&A market

See P6

See P18

See P21⚫

M&A deals involving Japanese companies are increasing
and there is high potential⚫

The government has been continually involved in businesssuccession of SMEs⚫

Established first Japanese venture fund (1982)⚫

Pioneered Japanese buyout funds (1998)⚫

Invested in 4,181 companies and managed acumulative total of ¥1.2 trillion of funds

Strong management resources
based on human, intellectual, andsocial capital

See P5

See P25

Our goal

Enhancing Corporate Valueby Promoting Our Growth
Strategy and Improving
Capital Efficiency
We advance our growth strategy by enhancing ourinvestment performance through thestrengthening of our investment management
capabilities as well as by enhancing ourfundraising capabilities.

Enhance corporate value in a bid to achieve ROE of 15% - 20%

Promote growth strategy

ROI*

Average of

2.5X
or moreAlso, we will gradually increase the size of new
funds to match the target market size while
reducing our investment ratio in stages, thereby
improving capital efficiency.
With the VC/PE markets growing and the supply ofrisk capital increasing, we believe that our target
ROE of 15%-20% is attainable.

Growth of VC market

Improve capital efficiency

External
fundraising ratio**

Size ofnew funds(domestic)

Growth of PE market

Total shareholder
return ratio

80％

Around¥100-150
billion60% - 100%

Growth of risk capital
supply in Japan

Market growth potential* ROI: Revenue from operational investment securities ÷ Cost of operational investment securities** External fundraising ratio: The ratio of limited partners’ capital commitments in funds established about once every three years.

or moreOur goal

Image of financial target and medium-to longterm plan indices within the framework of thebasic policy for improving corporate value

Past initiatives and results

Aiming For an ROE of
15%-20%Financial target : ROE of 15% to 20％
Results for FY
ended Mar. ‘22

Results for FY
ended Mar. ‘23

Results for FY
ended Mar. ‘24

Ordinary
income (loss)¥18.4 billion(¥3.0 billion)¥8.8 billion

We have been improving growth and stability
through highly selective, intensive investment aswell as improving capital efficiency through sharebuybacks and other measures for capital reduction.

Net income¥15.1 billion¥40.6 billion

Net assets¥197.4 billion¥130.7 billion

To achieve an ROE of 15% to 20%, we will
gradually expand AUM with a 3-year funding cycle
by enhancing our fundraising capabilities in
addition to further strengthening our investment
performance.

Total
shareholder
return ratio

285.7%

124.6%

ROE

7.3%

Also, we target a total shareholder return ratio of
60%-100% by implementing flexible sharebuybacks and distributions that are stable and inline with profit growth.

Around FY ending
Mar. ’27

Around FY ending
Mar. ‘30

Ordinary income¥22.5 billion¥31.0 billion¥7.5 billion

Net income¥16.0 billion¥22.0 billion¥137.6 billion

Net assets¥140.0 billion¥130.0 billion

Cumulative income¥42.0 billion*¥100.0 billion*2

50.0%

Cumulative total
shareholder return
ratio

79%

101%

24.7%

5.6%

ROE

11.3％

16.6％

¥332.3 billion¥419.2 billion¥465.6 billion

Capitalcommitments（AUM）¥500.0 billion¥570.0 billion

2.7x

1.6x

1.7x

ROI*3

2.5x or more

2.5x or more

Balance of
operational
investment
securities*4¥95.0 billion¥90.0 billion--

Capitalcommitments
（AUM）
ROI*3
Balance of
operational
investment
securities*4¥79.2 billion¥84.0 billion¥90.2 billion*

Cumulative target period: 3 years from FY March 2025

*2 Cumulative target period: 6 years from FY March 2025
*3 ROI: Revenue from operational investment securities ÷ Cost of operational
investment securities*4 After mark-down

12,000
Amount Raised/ Funded Companies
3,238

Market environment

Venture investment

4,000

3,675

3,694
3,400 3,366

966.4

Amount raised (\ billion)
10,000

869.2

3,500
2,828

3,000

2,583
8,000

Situation ofStartups in Japan

Number of funded
companies (incl. thosewhere funding amounts
6,000
are unknown)

612.2

1,669

560.8

2,000

1,394

1,500

364.0
258.9

203.0

Both the amount of funds raised for domestic
startups as well as the number of funded
companies remained resilient despite a decrease
from the previous year due to a global decrease incapital inflow into growth markets in 2023.

753.6

500.5

4,000

2,000

2,500

2,203

2,015

1,000

143.3

90.7

500

0

0
2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

[CY]

Note: 1. Created by JAFCO based on “Japan Startup Finance 2023” (First edition issued on Jan. 31, 2024) by Uzabase, Inc. Figures are from INITIAL (as of Jan. 23, 2024).
2. Figures for each year are those identified up to the time of aggregate calculation.

3. Due to the nature of the data, the figures, including those in the past, fluctuate with the progress of the survey. The smaller the value of a deal, the more likely it is to beaffected by the progress of the survey, especially the number of funded companies.
4. The amount of funds raised for 2023 “is estimated to land at around 850 billion yen, similar to 2021 and a year-on-year decrease of 12%, when considering the amount offunds raised that will become apparent later on” while the number of funded companies “is likely to surpass the previous year considering the numbers that will become

The number of domestic IPOs was at a level
similar to the previous year and is expected tocontinue at a high level.

apparent later on as this figure is more impacted by delay” according to comments from INITIAL.

No. of IPOs in all Markets in Japan
92

Total IPOs

90

83

77
IPOs with VC stake of 10% ormore and initial market cap. ofover ¥20 billion (excl. buyouts)

125

90

86

93

96

91

54

10

2013
Created by JAFCO based on publicly available information

8

5

1

2014

2015

2016

6

6

2017

2018

11

14

16

2019

2020

2021

7

9

2022

2023

[CY]

Number and Volume of M&A Deals
Involving Japanese Companies (IN-IN only)
Marketenvironment

Trends in the BuyoutMarket in Japan

Volume of M&A deals（¥ trillion）
IN-IN

Number of M&A deals
IN-IN

7.4

2014

The number and volume of M&A deals has been
growing recently with the backdrop of the postpandemic recovery of economic activity in addition
to economic slowdown and business successionrelated issues.
With the aging of owners of small and mediumsized enterprises (SMEs) and the fact that morethan half of such owners still lack successors,business succession is expected to accelerate

2015

2016

2017

2018

2019

2020

2021

2022

2023

[FY]

*Created by JAFCO based on RECOF M&A DATABASE. No. of deals includes deals classified as “M&A” and “In-group M&A” in the database.

Potential of the Buyout Market in Japan
Japanese PE
market size(% of GDP)1

USA

further.

4,134

Buyoutinvestment

Japan

11：1

No. of SMEs
in Japan3

Rate of lack ofsuccessors4

500,000
cos.

53.9％

OECD ranking in
no. of SMEs2

Average age ofcompany presidents44th

60.8 yrs.

1. Values sought by dividing “Private Equity (non-VC) AUM (3Q 2023)” (provided by Pregin) by “World Economic Outlook (October 2023) -GDP, current Price” (IMF); Japan
comes out to 1.16% and the US to 13.02% or 11.2x of Japan.2. OECD SDBS ISIC Rev.4 Number of enterprises, SMEs (2017)3. Number of companies in 2021 Economic
Census for Business Activity excluding large companies and small businesses (MinistryofInternal Affairs and Communications & Ministry of Economy, Trade, andIndustry)4. Teikoku Databank’s Nationwide Survey on Rate of Lack of Successors (2023)
Based on the 270,000 SMEs across all regions and industries available in Teikoku Databank’s CCR credit investigation reports, etc.

Market environment

Venture investment
Buyout investment

Increase of
Risk Capital Supply
in Japan

90.4

93.5

67.7

71.6

24.6

22.8

21.9

2020

2021

2022

67.8
Dry powder ($bn)

Unrealized value ($bn)

51.1
The amount of assets under management ofdomestic private equity funds has been increasingin the past 10 years backed by low interest rates
and policy expectations, reaching $93.5 billion at

43.2

39.9

21.2

23.6

21.7

22.3

25.5

the end of 2022.
16.0

16.9

16.0

16.5

16.9

29.7

34.9
25.1

19.5

5.3

6.7

5.7

5.8

8.7

10.1

2012

2013

2014

2015

2016

2017

14.8

16.1

2018

2019

[CY]
Source: Data provided by Preqin; “Japan Focused Private Equity (including Venture Capital) AUM, 2012 –2022”

Market environment

Venture investment

The Japanese
Government’s Startup
Development Five-Year
Plan

Pre-seed & seed

Early & middle

Later

Personnel/network development

Enhance funding for businesssupportCreate unicorn
companies⚫ Support of young personnel throughmentorship⚫ Expansion of entrepreneurial education⚫ Support for commercialization oftechnology seeds from universities, etc.

⚫ Increase investment of public capital

in VCs⚫ Strengthen support for R&D in deeptech
⚫ Improve environment for

stock options, etc.

Expand funding support forstartups

Exits (IPO/M&A)
Expand collaboration with large
companies⚫ Establish credit guarantee system that

The Japanese government announced the Startup
Development Five-Year Plan in November 2022with various support measures aimed at bolstering
personnel, funding, business environments, andother facets of startup growth.
The government aims to scale up investment instartups to 10 trillion yen by fiscal 2027, with agoal of creating 100 unicorn companies and100,000 startups, and it is providing support ineach stage of the investment process.

Business expansion incl.
international development

doesn’t require entrepreneurial
guarantees

Diversify exit strategies⚫ Introduce tax incentives for⚫ Promote M&A through open

reinvestment in startups, etc.

innovation tax incentives

Growth⚫ Develop secondary market forunlisted securities

Increase startups
Business expansion through public
procurement

Establishment⚫ Expansion of public procurement fromstartups, etc.

Business expansion into
overseas markets⚫ Enhance overseas incorporationand investor attraction⚫ Overseas market development

support, etc.

*Text and illustration from the Ministry of Economy, Trade and Industry’s “Government Efforts for Startup Development: Accelerating Social Issue Resolution andEconomic Growth with the Power of Startups," July 2023.

Market environment

Buyout investment

Government Support for
Business Succession andReorganization
With the aging population in Japan, coupled withthe aging of business owners, succession in small
SMEs is recognized as a social challenge*.
The passing on of valuable management resources
to the next generation by SMEs is thought to be
crucial for the economy to grow sustainably*1. As
such, the government has been making ongoing
efforts for business succession and reorganizationof SMEs.

The Ministry of Economy, Trade and Industry’s response and budget
allocation for SMEs, small businesses, and regional economies

Budget of measures for
SMEs***

Measures for thedevelopment of SMEs
and small businesses andimprovement of theinvestment environment**

Budgets for thepromotion oftransformation throughbusiness succession andreorganization***¥650.2 billion(Budget for fiscal 2024 + Supplementary budget for fiscal 2023)⚫

Financial support for business reorganization, improvement of productivity, and adaptation⚫

Promotion of transformation through family succession and third-party succession incl. M&A⚫

Creation of growth-oriented SMEs through innovation support⚫

Strengthening of management support systems, etc.

⚫

Subsidies for business succession (SME productivity promotion project)¥200.0 billion⚫

SME revitalization and business succession comprehensive support project¥19.8 billion⚫

SME grouping/reorganization support fund project¥12.0 billion⚫

Successor support network project¥0.44 billion** Cited from Summary of the Supplementary Budget for Fiscal 2023 and the Initial Budget for Fiscal 2024, MLIT (budget enacted March 28, 2024).
*** Cited from Points on SMEs, Small Business Owners and Regional Economy Budgets (revised budget for fiscal 2023 and initial budget for fiscal 2024)(amended April 2, 2024)*Source: 2023 White Paper on Small and Medium Enterprises in Japan

Achievements andmanagement resources

Venture investment

JAFCO’s Presence With
Large IPOs
We have a track record of creating mega ventureswith our policy of selective, intensive investment
and bold business development.

445
cos.

67 cos.

85

20 cos.

cos.

2014 to 2023

2014 to 2023

VC-Backed IPOs

Large IPOs*2 with market capof ¥20 billion or more2014 to 2023

Total Holdings in IPOs with Market Cap of ¥20 Billion or More (First Price-Basis)
We rank first in cumulative market capitalization ofholdings in large IPOs*2 in Japan over the past
decade.

¥157.5 billion
Company A
Company B
Company C
Company D
Company E
Company F
Company G

Company H
Company I
Note: 1. Prepared by JAFCO based on IPO prospectuses.
2. Large IPOs: IPOs with a market capitalization of ¥200 billion or more and a VC share of 10% or more.
3. Investments by buyout funds and IPOs of VC group companies are excluded.
4. Market capitalization holdings are calculated by JAFCO based on IPO prospectuses. The number of shares held by VCs are the number of shares held at the time application.

Achievements andmanagement resources

Buyout investment

Buyout Investment Utilizing
Our VC Know-How and
Network

Growth support leveraging knowhow from business succession investments
M&A EXIT
We utilized our knowhow as a VC on cutting-edge services tohelp significant increase sales through e-commerceestablishment, overseas expansion and entry into new
business, contributing to expanding and strengthening theplatform.
Significant value appreciation was realized 3 years afterinvestment, culminating in an M&A sale

Planning, manufacture, and sale ofmotorcycle goods and apparel under
the KOMINE brandWe station our members part-time on sight at
portfolio companies for a time after investment tosupport their growth through PMI that utilizes our

Supported growth of a recently established company through majority investment

knowledge and network in venture investment.
IPO EXIT

We leverage insights from venture investments inbusiness succession cases to provide growth support andachieve IPO success through majority investments inearly-stage companies.

We acquired 85% of outstanding shares of an early-stage

company just two and a half years after its establishment.
We helped them increase their corporate value throughhands-on management support, capital/businessalliances, etc.
The company was listed on the TSE Growth Market five
years after its establishment.

AI solutions business including theprovision of AI software and build-up
packagesOur Flagship Funds in Operation
Achievements andmanagement resources

Venture investment
Buyout investment

We form a new fund about once every three years.
The maturity period of funds is 10 years*.
Extended¥60.0 billion (50％)

Continual Fund
Formation and
JAFCO’s Fund Size
We believe that continuing to invest through goodtimes and bad is important for stabilizing our
performance and ensuring business continuity.
As the number of funds and overall market fundsize is growing, we are continuing to establish
funds of considerable size.

SV4 FundMaturity2024.12¥75.0 billion (43％)
2026.12SV5 Fund¥80.0 billion (36％)
SV6 Fund2029.12¥97.8 billion (22%)
2032.12SV7 FundEstablished

2013

2016

2019

2022

* A two-year extension is possible by JAFCO’s decision And additional two-year extension is possible with the consent of investors.
** Numbers in parentheses indicate JAFCO’s investment ratio.

No. of Funds Established by Scale (Entire Market)
Average for funds
established in 2023:¥7 billion*
13
12
29

By further increasing the size of our funds with the
backdrop of a growing market, we will aim to
maintain our competitive advantage.

26

35

JAFCO’s most recent
VC fund (V7)¥65.0 billion
Over \10 bn\5 bn - \10 bn\1 bn - \5 bn\1 bn or less

Amount unknown
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Source: “Japan Startup Finance 2023” (P. 92: Trends in fund establishment by size; as of Jan. 23, 2024) by INITIAL (First edition issued on Jan. 31, 2024).
* Average for funds established in 2023: Sought by dividing the fund size (amount) of the funds listed in the “list of funds established in 2023” in P94-97 ofJapan Startup Finance 2023 by the number of funds (excluding those with undisclosed amounts)** Figures for each year are those identified up to the time of aggregate calculation. Due to the nature of the data, the figures, including those in the past, willfluctuate with the progress of the investigation.

Achievements andmanagement resources

The 3 Management
Resources That Are
Key to Growth

Human Capital
The private equity investment business calls for strong
individuals, and having a system for nurturing
investment professionals is vital.

No. of investment professionals with 10+
years of experience21

No. of “most influential venture capital
investors in Japan”(past 7 years)*

10

Investments to dateThree management resources are key to thesuccess and growth of our business: humancapital, in which we cultivate competent
investment professionals; intellectual capital,
which enhances the reproducibility of success inthe highly uncertain investment business; andsocial capital, in which we faster our relationships
with various stakeholders.

4,181 cos.

Intellectual CapitalDue to the high uncertainty, the business requires
reproducibility of success based on years of experience.

Total funds managed (cumulative)¥1.2

trillion

No. of investors to date

1,300

Social Capital
Robust trust-based relationships with various stakeholders give
us a competitive advantage.

No. of business contacts*Based on Forbes Japan's Midas List of most influential venture capital investors in Japan (top 10), 2018 to 2024.

4,926 cos.

Section 3: Initiatives for Enhancing Corporate ValuePrimary targets

Our Primary Targets andFour Initiatives forAchieving Our Goal

Initiatives
Further evolution of highly selective, intensive investment• Develop seed projects in view of pre- and post-startup stages• Promote exits (not just IPOs) and establish approaches• Create synergy between venture and buyout investment• Increase ratio of buyout investments

Return on investments(ROI*)

2.5x
or more① Enhancing investment
management capabilities
Strengthening of corporate value enhancement efforts for
portfolio companies（Average of 2.3x over the past 10 yrs）

• Develop startup support (customer acquisition, human resources,and back-office development)• Expand ecosystem for entrepreneurship and new businesscreation

We are promoting various initiatives to achieve ourtargets in line with the Basic Policy for Enhancing
Corporate Value.

Increase external
fundraising ratio in linewith increase of new
fund size

80％
Total shareholder
return ratio

60% -100%or more② Enhancing fundraisingcapabilities• Form funds and fundraise every three years• Increase the fund size, backed by an expansion of the market for
venture and buyout investments• Expand investor base
• Strengthen relationships with investors③ Strengthening theorganizational foundation• Expand systems for recruiting and developing diverse personnel④ Shareholder returns• Distribution of 3％ DOE or 50% of net income as dividends• Consider share buybacks for amounts in excess of necessary
funds

ROI: Revenue from operational investment securities ÷ Cost of operational investment securities

Further evolution of highly selective, intensive investment①
Enhancing Our
Investment Management
Capabilities

Business startup program forpotential entrepreneurs and seeds

Supporting Establishment of Ventures by Potential Entrepreneurs

Collaboration,
POC, etc.
Establishment

We implemented a business startup program forpotential entrepreneurs to expand the market,
selecting 15 cases for the first period (fiscal 2023).

Participation as
guest entrepreneurs

Business firms

Structuring
Knowledge

We plan to continue our activities vigorously in fiscal
2024 and beyond.

Entrepreneurs, etc.
Potential
entrepreneurs

Field selection
Technology
seeds

Universities /Research
institutions

Strengthening of corporate value enhancement efforts for portfolio companies
In order to increase our investment management
capabilities, we are actively engaging in initiatives
for potential entrepreneurs for the further
evolution of our highly selective, intensive
investment as well as in broadening theecosystem for new business creation forenhancing the corporate value of portfolio
companies.

Contribution to the startup
ecosystem
In enhancing the corporate value of portfolio
companies, industry-wide involvement is crucial.
Therefore, we will continue activities for the
expansion of new businesses by large corporations
and CVC growth.
We will continue our efforts to enhance the startup
ecosystem.

(20%)

Fundraising capabilities

(20%)

②
Enhancing Our
Fundraising Capabilities

97.8
75.0
[¥ billion]

JAFCO’s capital
29.7
contribution（50%）(investment ratio)

External funds
raised*With the SV7 Fund, we set a target of ¥95.0 billion

60.0

32.4
(43%)

80.0

(25%)

22.0
(22%)

29.1
(36%)
75.8

42.6

50.9

30.3
SV4

SV5

SV6

SV7

Around 27.03 Around 30.03 Around 33.03

but procured ¥97.8 billion, steadily increasing thefund size.
In order to further enhance our fundraisingcapabilities, we are working to increase external

capital commitments and develop new investor
segments.
We are working on initiatives to secure funding
from pension funds and overseas investors, aiming
to further strengthen our fundraising capabilities.

JAFCO

We are expanding the fund size by exploring newinvestor segments.
Efforts for attracting investments frominstitutional investors (overseas, pension funds,etc.) and individual high-net-worth investors are
currently underway.

22%
Financialand other

SV7

4%¥97. 8 billion

Pension funds

institutions
44%

Business
firms
30%

Established June 2022

③
Strengthening theOrganizational
Foundation
In strengthening our organizational foundation, we
have been focusing not only on new graduate hires
but also on mid-career hires.
In the buyout sector, mid-career hires havecomprised the core team. With the appointment of
two new managing directors, we are actively
continuing recruitment to expand our organization

Recruitment

Training

Expanding the workforce

Optimization and systematization

Men

Women

Total

3

3

+6

New graduate(out of 379 companies)

Mid-career

14

3

+17

*Provided by OpenWork; As of April 15, 2024.

Focus on hiring recent graduates in
addition to experienced professionals

Continue instructor program for new graduates
Ratio of women employees

Ratio of mid-career managers

27.8％

50%

(Target: 1/3 or more)(Target: 1/3 or more)

Strengthen the framework for training capitalists
Introduce dedicated Investment Division HRBP

*Figures for employees are cumulative figures for FY March 2024.

Organization

Expanding the organization forbuyout investment
Two new managing directors were appointed in
February 2024, establishing a structure with six

We also established a fund specializing in buyout
investment, developing our organizationalframework to elevate buyout investment as our
second pillar.

Ranked 1st in growth environment for employees
in their 20s in the securities firms / investment
funds / investment-related industries

managing directors (BO7).
We are advancing the establishment of a robust
organizational foundation to further develop buyout
investment in line with the growth of the private
equity market and increase of risk capital supply.

285.7％266.5%④
Shareholder Returns

Total return ratio(¥39.5 billion)(Amount of share buyback)The greater of either 3% of shareholders’ equity(average for beginning and end of period) or 50%
of net income will be paid out as dividends.

124.6%(¥61.3 billion)

Payout ratio(¥42.4 billion)

36.9%

In FY March 2024, 50% of net income (¥69) was
greater than 3% of shareholders’ equity (¥64), so
we plan to pay out dividends of ¥69 per share.

(¥10.2 billion)
40.0%

34.1%

26.1%

If profits accumulate going forward, we willconsider additional returns depending on the sizeof the next fund and the status of fundraising.

16.0%

Dividend per share[\]
Total dividends paid[\B]
Dividend policy

30.8%

13.7%

50.0%

26.5%

25.6%

11.0%

15.03

16.03

17.03

18.03

19.03

20.03

21.03

22.03

23.03

24.03

33.3

33.3

33.3

35.7

37.3

39.3

46.0

51.0

150.0*

69.0 (expected)

4.4

4.4

4.4

3.3

3.5

3.6

4.1

3.6

8.2

3.8 (expected)

Flexible distribution with afocus on continuity

3% of shareholders’equity*3Newshareholder
return policy*2

Note: 1. For FY March 2023, the greater of a or b.
a. ¥150b. Amount calculated by dividing FY March 2023 net income including the gain on the sale of shares in Nomura Research Institute, Ltd., and after deducting theamount of the share buyback through TOB, by the number of the Company’s shares outstanding on the record date of the dividend (excluding treasury sharesthen held by the Company)
2. The Company’s basic dividend policy from FY March 2024 onwards is to pay the greater of 3% of shareholders’ equity (average of beginning and end of period) or
50% of net income.
3. Average of the beginning and end of the period. Shareholders’ equity does not include unrealized gain (loss).