Tokyo, Sept. 9 (Jiji Press)–State-backed Japan Investment Corp. said Wednesday that it has set up a new fund worth up to 400 billion yen to promote industrial reorganization in the country.
The new fund may play a key role in the realignment and consolidation of manufacturing and service industries hit hard by the coronavirus pandemic.
JIC set up a new company, JIC Capital, to manage the fund, which will operate for 10 years and invest in about 10 firms within the first five years in principle.
The fund will start investments as early as this year, spending between 10 billion and 40 billion yen per deal in general. It is also considering an investment worth over 200 billion yen using loans.
The goal of the fund is to strengthen the competitiveness of Japanese companies and create new industries. The fund “will promote a shift to a highly competitive industrial structure,” JIC Capital Chief Executive Officer Shogo Ikeuchi said at a press conference.
JIC needs to manage risks strictly, as companies including Japan Display Inc. <6740> have faced financial difficulties after undergoing realignments led by its predecessor, INCJ Ltd.
The new fund will not engage in any investment intended to aid troubled companies, JIC CEO Keisuke Yokoo said at the press conference.
Set up in September 2018, JIC has financial resources of some 3 trillion yen. In July, it formed its first fund to invest in startups.