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Japan Post affiliates’ cooperation limited to private equity ‘for the time being’

Japan Post Bank Co. and Japan Post Insurance Co.'s first joint effort in managing their combined 285 trillion ($2.7 trillion) in assets, announced at the end of January, is narrowly focused for now on domestic private equity investments but could broaden in the future.

The two Tokyo-listed affiliates of Japan Post Group Co. launched the Japan Post Investment Corp. Feb. 9 to make investments focused on buyout deals and venture capital investments in Japan.

The new entity "will make investment decisions based on assessments of commercial viability and provide management support to portfolio companies, along with supplying equity financing together with other outstanding fund managers and other partners," according to a joint news release by the two companies on Jan. 30.

A spokesman for Japan Post Bank, which owns roughly two-thirds of the new company to Japan Post Insurance's one-third, wouldn't rule out the possibility that the scope of the cooperation could expand.

The spokesman said JPIC is focused on private equity "for the time being," but declined to comment on whether the new company could take on other market segments in the future.

Over the more than two years since the privatized financial arms of Japan's postal system were listed in November 2015, Japan Post Bank, with assets of 208.2 trillion, and Japan Post Insurance, with 77.2 trillion, have been building extensive, separate asset management capabilities — with roughly 150 professionals each.

Katsunori Sago, the former Goldman Sachs Group (GS) executive tapped to lead Japan Post Bank's investment operations in mid-2015, noted in an interview with Pensions & Investments late last year, that the two affiliates were sharing information on external money managers and predicted cooperation between the two — to avoid duplicated efforts — could be stronger going forward.

A spokesman for Japan Post Insurance late last year said Atsushi Tachibana, the Dai-Ichi Life Insurance Co. veteran tapped as managing executive officer of the insurance arm's investment operations, "has the same opinion."