TOKYO, Aug. 11 – Norinchukin Bank announced on Aug. 10 that it will set up a subsidiary specializing in investment in an effort to invest more in unlisted companies.
It plans to launch a 39-billion-yen fund in October to help improve its own profitability, as well as supporting growth of firms in the food and agriculture sectors and contributing to digitalization of agricultural cooperatives in Japan, known as the JA group.
The new company, Norinchukin Capital, will be capitalized at 100 million yen and will be wholly owned by Norinchukin Bank.
Norinchukin Capital will operate two different funds to increase the value of companies it invests in and then obtain profits through initial public offerings and sales of shares to other firms.
The fund which will be established in October will invest in a variety of companies in the growth stage. It plans to acquire a majority stake in some firms and get involved in their business management.
After summer next year, Norinchukin Capital will also launch a fund of around 10 billion yen to invest in startups and emerging firms.
The fund will invest in companies believed to contribute to digitalization of the JA group and back up the growth of firms with digital technologies related to such areas as food, agriculture, finance and health.
According to Norinchukin Bank, demands for funds among venture firms are increasing.
Because Norinchukin has invested in firms in wider variety of growth stages compared with its competitors, it hopes to make use of its expertise and the JA group’s network in the new subsidiary’s business.
In five to ten years, it hopes to accept funds from outside investors.
“We hope the new company will contribute not only to strengthening profitability but also to sustainable growth of the society, mainly companies in the food and agriculture sectors,” said an official of Norinchukin Bank.