JAFCO : Presentation for New Investors

Our Goal and

Its Feasibility

Through our basic policy for enhancing corporate

value, we designate medium- to long-term goals.

We aim to realize our purpose as a unique investment management company that combines strengths in venture and buyout investment.

Purpose Fueling perpetual growth; investing in bold visions

Our goal

Basic policy for enhancing Promote growth strategy × Improve capital efficiency

corporate value

See P15

Goal: ROE of 15％-20％

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

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

See P6

succession to next generations. By combining strengths in both areas and enhancing expertise, we will aim to realize an even higher

level of performance.

Backed by our more than 50 years of experience,

our continually evolving and robust management resources, and the market's growth potential, we

Market environment

Achievements and

management resources

believe that this is an attainable goal.

Growth of the startup market

⚫ Startup funding increased tenfold in 10 years

See P20

⚫ Backed by Startup Development Five-Year Plan, etc.

BuyoutSee P18

Potential of the business

• M&A deals involving Japanese companies are increasing and there is high potential
• The government has been continually involved in business succession of SMEs

Strong management resources

Business Endeavors for

Realizing Our Purpose

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 record and a fundraising capability that rank at the highest level domestically.

Venture

Japan

investment

Since 1973

Balance of unlisted securities

¥101.8billion

No. of investment professionals

42

Global

Balance of unlisted securities

¥234.3billion

No. of employees

162

¥1.2trillion 4,181 cos. 1,031 cos.

Our Two Business

Combining the strengths of venture and buyout

investment to achieve greater performance

Domains

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

Venture investment can offer high growth potential, it also comes with high volatility. By combining it with the stable revenue of buyout investment, we are stabilizing our operations.

By combining the strengths of venture and buyout

investment going forward, we will establish a

unique organizational foundation in an aim to

achieve an even greater level of performance.

Venture investment

• Startups in their founding to growth stages
• Make minority investment of a 10-20% stake
• Lead large-scale financing in early-stage companies as the lead investor
• 3 to 8 years
• Primarily aim for exit through IPOs, while also considering M&A deals
• Aim for returns up to tens of times in size
• Significant volatility due to susceptibility to market influences

Buyout investment

• Companies in their early to mature stages that have realized earnings
• Make majority investment of a stake of 50% or more
• In addition to conventional buyout, we make growth-supportive investment focused on the growth of portfolio companies
• 3 to 5 years
• Exit strategy considers M&A as well as IPOs
• Stably aim for returns of about 3 times in size
• Relatively less influenced by the market and volatility is low

Business Model

JAFCO invests in unlisted securities by channeling

capital gathered from investors into funds.

Our revenue streams include fund management

Relationship building and cooperation

fees and success fees from fund operations, and

we also realize capital gains by investing our own

capital into the funds.

Fundraising and

information provision

1. Fund management fees

Fund

operation

2. Success fees

Investment of

Deal sourcing

Management support

We aim to maximize profits by improving our

investment management, fundraising, and

organizational capabilities as well as expanding

our fund size and achieving high returns on

investment (ROI*).

own funds

3. Capital gains

Three Sources of Income

1. Fund management fees

• Fixed fees for the management of funds
• Capital commitments from limited partners*** (AUM) × Approx. 2% per annum
• Key driver: External capital commitments (AUM)

Limited partners

Capital

commitments

Fund management fees

Fund management

Our income sources are fund management feesearned as fees relative to the capital commitments made by our limited partners into our funds, success fees*, and capital gainsderived as returns from our own investments in the funds.

The key drivers of our growth are the increase of ROI** (investment management capabilities) and funding from our limited partners (fundraising capabilities).

2. Success fees

• Performance-basedcompensation for funds
• Fund management income × Rate of limited partners' interests×20%
• Key driver: ROI

Limited partners

Investment recovery (exit)

Portfolio companies

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**

Capital gains

Funds

Capital commit-

ment

Investment recovery (exit)

Portfolio companies

• Success fees are recorded once cumulative distributions exceed capital commitments.
• ROI: Revenue from operational investment securities ÷ Cost of operational investment securities

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

Sustainable Competitive

Advantages

Our strengths are our investment management and

fundraising capabilities, supported by our

Purpose

Fueling perpetual growth; investing in bold visions

Enhancing corporate value

organizational foundation.

By continuously strengthening these elements, we fuel perpetual growth while generating profits based on a stable business foundation and increasing funds under management.

Investment management

capabilities

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

Fundraising capabilities

Systematically enhance existing and new

funding for stable increase of the fund

size and external funding

Organizational foundation