Business Overview

Business Overview

Our revenue is made up of two categories

1. Fund Management Business: Management fees and performance fees earned by managing the fund

2. Principal Investment Business: Investment returns such as dividends and gains on sales from investing in funds that we manage

An investment fund generally invests and manages assets according to areas and themes set in advance.

Fund Management Business

Focusing on business opportunities that extend beyond nations, regions and established frameworks, Mercuria Investment Group forms funds mainly through Mercuria Investment Co., Ltd., which is the core entity of the group. The Group invites mainly institutional investors in Japan and overseas to invest in these funds, and a team dedicated to each fund is responsible for end-to-end fund management including selecting attractive investees, executing, managing and exiting investments.

Mercuria Investment Group invests mainly in alternative assets. Alternative assets have low liquidity and are, therefore, held long term, with 3-5 years as a benchmark. During this period, we and the other fund managers undertake activities such as enhancing the value of investees and managing cash flows. As a result, investments in alternative assets can be expected to yield greater returns than so-called traditional asset classes (domestic and foreign stocks, domestic and foreign bonds) and this is an area that has been attracting attention among institutional investors as a new investment target in recent years.

Fund Management Business

Principal Investment Business

Principal Investment Business

Mercuria Investment Group uses its own cash to make principal investments in funds it manages and upfront investments in domains in which it might consider establishing funds in the future.

In the case of alternative asset management, it is common for fund managers to make some degree of principal investment in funds they manage. Since fund managers take the same risks as fund investors by making principal investments, this is referred to as "same-boat investment" and also shows a strong commitment to the funds they manage.

Revenue Structure

The revenue structure is unlikely to result in losses because management fees, which are stock income, underpin business as stable revenue. Depending on fund performance, return on principal investments and performance fees are added as upside revenue.

Revenue Structure
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