Effective Fund Management

1. Establishment of oversight committees

In order to exercise appropriate fund administration and operation, the following committees have been set up.

  1. (1) Investment Committee: After undergoing sufficient examination by the Investment Committee,a final decision is made on each investment by the Chief Investment Officer (CIO).
  2. (2) Portfolio Committee: In cooperation with the Hands-on and Exit Committees, appropriate fund management is achieved by monitoring the risk to the entire fund during portfolio construction, and through ongoing assessment of the anticipated return from the fund.
  3. (3) Hands-on Committee: Assesses the situation and progress of portfolio companies through hands-on monitoring of business activity and occurring problems.
  4. (4) Exit Committee: The financial health of portfolio companies and the overall operational situation of the fund are considered in cooperation with the Portfolio and Hands-on Committees, and the exit policy (IPO, M&A, etc.) is determined.

2. Avoidance of conflict of interest

With self-investment, fund investment, and the concurrent administration and operation of several funds, the potential for a conflict of interest exists, and so a mechanism is necessary to minimize this possibility.

  1. (1) Guidelines have been established to avoid any conflict of interest between funds.
  2. (2) In principle, we do not self-invest so as to avoid any conflict of interest between the fund and our company.

In this way, we endeavor to avoid the occurrence of any conflict of interest.

3. Enhanced disclosure

In order to convey the fund management situation accurately and promptly to the fund investers, our methods of disclosure have been made entirely transparent.

  1. (1) Closing of accounts: Accounts will be settled twice a year, and after the audit by the outside auditor is received, the statement of accounts will be disclosed in the full-year business results.
  2. (2) Business report on portfolio companies: For full and complete disclosure, quarterly reports are drawn up on the business condition and activities of portfolio companies. Moreover, when any unexpected situation arises at an portfolio company, it is reported promptly.
  3. (3) Convening of the General Fund Investors’ Meeting: ‘The General Meeting will be held within 120 days subsequent to the closing of the Fund Investment Partnership Account; At the time of the closing of interim accounts, a fund investment briefing will be arranged in order to provide a direct explanation of the partnership’s fund operation performance.

*Circumstances may differ from one fund investment partnership to another.

4. Appropriate evaluation of the portfolio company

On the basis of clear standards, each portfolio company is strictly appraised, and the appraisal is then audited by an outside auditor so as to eliminate the possibility of an arbitrary or inaccurate appraisal occurring.