Postal giants to set up private equity firm next month

Japan Post Bank and Japan Post insurance are to set up a private equity firm on 9 February according to statement from the two.

The new firm, Japan Post Investment Corporation, will have capital and reserves of 1.5 billion yen and:

“… form new funds [vehicles] and supply risk money through those funds primarily to finance buyout deals in Japan [for the purposes of] business realignment, succession, rehabilitation etc. This is in order to help nurture industries in Japan.

“In parallel, the New Company will support the growth of business enterprises by encouraging investment in technologies that could become Japan’s core industries and in start-up companies that are in a phase of full-scale business expansion.”

Japan Post Bank will own 66.7% of the preferred shares which make up 1.45bn yen of the firm’s capital base and Japan Post Insurance the rest. Voting rights will be held 50% by Post Bank, 25% by Post Insurance and 25% by the “offices and employees” of the new company.

A tool for implementing government policies?

The statement says nothing on from where the talent to staff the new entity will come but the firm will already have access to some in-house expertise via Katsunori Sago, a former Goldman Sachs executive who in May 2015 was appointed to head asset management at Post Bank as it planned the reallocation of its portfolio.

Also missing, remarkably, is any mention of how the venture will contribute to the two firms’ earnings — despite the idea of “working to implement sophisticated asset management for revenue growth” appearing twice in an explanation of the firm’s purpose.

The absence of such a forecast raises suspicions that the firm is being established as a vehicle for furthering the corporate governance ideas of the Post companies’ main shareholder, the Japanese government.

Who will head the Investment Corporation is not yet known but “an individual nominated by Japan Post Bank is scheduled to be appointed as the President and Representative Director.”

For more on the investment portfolios of Post Bank and Post Insurance see the last entries on the page accessed via ‘The Giants’ tab above.

© 2018 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes big commitments of money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com and a link provided to the original text on that site.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

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