Background behind the establishment of funds

Impact investing is still relatively unfamiliar in Japan. However, the market has been expanding significantly overseas, especially in Europe and the United States. In 2022, this market reached a size of approximately JPY 160 trillion and it is expected to continue to grow. The domestic market grew over 170-fold from about JPY 34.0 billion in 2016 to JPY 5,848.0 billion in 2022.
Due to its rapidly declining birthrate and aging population, it is said that Japan faces advanced social issues. Government subsidies alone will not resolve these challenges. Accordingly, the use of private capital through impact investing is very significant.
Impact investing is not a donation but an investment, and it seeks economic returns. SBI Shinsei Corporate Investment has more than 15 years of experience in private equity investments, dating back to when it was a department of SBI Shinsei Bank. We leverage the experience and expertise that we have developed over the years to support the growth of our investee businesses.
We believe that it is possible to make investments that have an impact on society while also having adequate economic appeal.

Difference from traditional venture investment

When choosing investment targets and making investments, traditional venture capital investors evaluate and determine rationality and risk from an economic perspective. In contrast, impact investors assess and determine rationality and risk from not only an economic perspective but also a social perspective. SBI Shinsei Corporate Investment focuses on impact investments where there is a positive correlation between economic and social results rather than a trade-off.
There are three requirements regarding the social impacts of an investment: (1) management’s intention to address social issues can be confirmed, (2) the social outcomes of the business can be identified, and (3) the social impact during the investment period is measurable.

What is social impact management?

Quantitatively and qualitatively measuring and determining the social impact (the extent to which social issues are addressed) of an investee’s business is known as social impact assessment.
The investee can use the results of this assessment to enhance its recruitment efforts and develop sales tools by presenting these results as part of its business results. The investee may also review its strategies and business by incorporating the process and results of the social impact assessment into its management PDCA cycle. This process is referred to as social impact management.
Expectations regarding the utilization of social impact management are growing at multiple investment destinations as a “social IPO” that complements the equity story presented at the time the company is listed.

Background behind the establishment of Japan Impact Investment II Limited Partnership (“Fund II”) and the concept of the fund

In March 2019, the childcare support fund completed its investments in six projects, and we subsequently established the second fund in June 2019. Building on our track record and experience as an impact investor through our childcare support fund, Shinsei Impact Investment collaborates with the Japan Social Innovation and Investment Foundation (SIIF) to jointly manage Fund II. Mizuho Bank, Ltd. has joined us as an operational advisor. Financial institutions, operating companies and educational corporations have also participated as limited partners. We have developed a system for engaging more entities in social impact investing and supporting additional venture companies addressing social issues through investment.
In addition to childcare, Fund II also invests in the nursing care sector. We aim to establish a “lifestyle solutions fund” for working individuals by supporting the growth of businesses in childcare, nursing care and new work styles, businesses which have a social impact in the development and improvement of work environments that accommodate people’s many different stages of life.