1 Index 1. Financial Performance ・・・・・・・・・・ ・ ・ ・ 03 – 13 2. Investment Activity ・・・・・・・・・・・・・・ 14 – 21 3. Assets under Management ・・・・・・・・・・・・ 22 – 23 4. Our Mission ・・・・・・・・・・・・・・・・・・ 24 5. Appendix ・・・・・・・・・・・・・・・・・・・ 25 – 33 6. Disclaimer ・・・・・・・・・・・・・・・・・・・ 34 Consolidated financial information reflects only JAFCO's interests. The contents of this document are based on materials available at the time of its compilation and no guarantee can be made as to the continued accuracy and reliability of the material. The contents may be changed without advance notification. Risks and uncertainties including changes to economic circumstances may cause results and projections to differ materially from those presented in the document. The information in this document is for presentational purposes only and is not an inducement to invest in securities issued by JAFCO or JAFCO-operated funds. JAFCO holds all rights to this document. With the exception of material taken from other sources, no part of the document may be used or reproduced for any purpose whatsoever without prior permission. 2 Summary of the year ended March 31, 2018 Operating environment ► Although Nikkei stock average hit an all-time high since the economic bubble burst, the market turned unstable due to uncertainties at home and abroad ► In the IPO market, high-profile companies continued to attract funds from Japan and overseas ► Large funding rounds by startups increased Performance ► Capital gains totaling ¥13.6 billion on sale of listed/ unlisted shares (¥8.8 billion a year ago) ► Three major IPOs from SV4 portfolio Funds ► JAFCO committed additional ¥10 billion to SV5, bringing total fund size to ¥75 billion Investment ► ¥30.2 billion on a global basis (¥20.9 billion a year ago) ► Investment per company increased in scale Business structure ► Transformed into partnership model from corporate model Capitalization policy ► Buyback of all JAFCO shares held by Nomura and Nomura Research ; cancellation of 32.6% of shares outstanding prior to buyback, including existing treasury stock ► Shares outstanding after cancellation: 32.5 million shares, of which treasury stock accounts for 4.97% (1.6 million shares) 3 Financial Results (JAFCO’s interests) (¥ Million) Year ended Year ended Year ended Comparison March 31, 2016 March 31, 2017 March 31, 2018 Total Total A Total B B/A Total net sales 41,155 27,857 29,470 106% Capital gains 15,689 8,800 13,621 155% Income from fund management 8,688 7,062 5,987 85% Management fees 3,812 3,494 3,551 102% Success fees 4,875 3,567 2,435 68% Additions to investment loss reserves 3,098 1,905 2,283 120% Reversal of investment loss reserves 3,673 4,741 3,148 66% SG&A expenses 5,689 5,476 6,017 110% Operating income 19,226 12,324 14,252 116% Ordinary income 19,808 13,666 15,554 114% Profit attributable to JAFCO Co., Ltd. 17,018 11,073 24,235 219% Stockholders Extraordinary income on the partial sale of shareholdings in Nomura Research 4 Funds under Management ▶ Total commitments ▶ Net assets and distributions (¥Billion) (¥Billion) 600 300 Extended Distributions Newly raised Under management Net assets 432.9 434.8 400 200 116.5 348.5 169.6 34.3 60.1 69.5 42.7 17.9 174.6 200 100 15.9 258.2 139.8 245.5 109.5 120.4 158.0 0 0 16.03 17.03 18.03 16.03 17.03 18.03 V2 (¥94 billion) was liquidated and SV3 (¥146.5 billion) entered the extension period Exchange rate 16.03: US$1 = ¥112.68; 17.03: US$1 = ¥112.19 Note: 1. Figures are rounded to the nearest decimal place 18.03: US$1 = ¥106.24 2. JAFCO’s share in operating funds: 38.5% (16.03), 36.6% (17.03), 43.4% (18.03) 5 Capital Gains & Losses (JAFCO’s interests) (¥ Billion) (¥Billion) 35 Capital Gains 13.6 Gains, net (Listed) 31.7 Listed 11.3 30 Gains (Unlisted) 27.2 Unlisted 2.3 25 Losses (Unlisted) 20 15 11.3 10.3 10.010.6 10 7.2 6.5 5.9 6.8 5 3.0 3.3 3.1 3.6 0 (5) (3.3) (3.6) (3.8) (4.9) (4.4) (10) (6.6) (7.5) (15) 12.03 13.03 14.03 15.03 16.03 17.03 18.03 Unrealized gains (¥ Billion) 3.9 7.2 38.9 15.2 6.5 11.7 9.9 Major IPOs and M&A of a buyout investment contributed to capital gains Note: 1. Gains (Unlisted) include other portfolio-related revenues 3. “Unrealized gains” are unrealized capital gains on listed operational investment securities 6 2. Gains, net (Listed) and Losses (Unlisted) are after impairment losses 4. Figures are rounded to the nearest decimal place Realized Losses & Reversal of Reserves (JAFCO’s interests) （2017.04-2018.03 ） (¥Million) Capital gains 13,621 ①Listed 11,281 Unlisted 2,340 (¥Million) ②Realized gains 6,750 Reversal of investment loss reserves 3,148 Sales of securities (gross of ③Realized losses (4,410) ③ 3,686 exchange difference shown below) Difference between the exchange (584) for reserve additions and sales Others 45 Realized losses were mostly covered, taking into account reserve addition/ reversal during the year and foreign currency effects 7 Investment Loss Reserves (JAFCO’s interests) (¥Billion) (¥Billion) 100 Balance of unlisted securities (left scale) 10 Balance of investment loss reserves (left scale) Additions to investment loss reserves (right scale) 75 68.5 70.1 65.0 57.3 50.9 49.6 50 47.7 5 3.4 3.2 3.1 2.3 2.0 25 1.7 1.9 19.7 18.8 18.8 15.8 15.2 12.3 10.4 0 0 12.03 13.03 14.03 15.03 16.03 17.03 18.03 Reserve ratio 28.8% 26.9% 28.9% 27.5% 29.8% 25.9% 20.9% Additions to investment loss reserves rose mainly overseas Note: Figures are rounded to the nearest decimal place 8 Breakdown of Investment Loss Reserves (JAFCO’s interests) (\Million) 2016.04- 2017.04- Reserve Policy 2017.03 2018.03 1. Company-by-company reserves: Additions to Investment Reserves made if estimated returns are below 70% of book value 1,905 2,283 Loss Reserves 2. General reserves： Reversal of Investment 4,741 3,148 Reserves on investees that are not subject to company-by- Loss Reserves company reserves (Investments made in and after January 2017 Investment Loss Reserve 12,332 10,351 are no longer subject to general reserves) Balance Breakdown of the reserve balance (as of March 31, 2018) (\Million) Company-by-Company Reserves General Reserves Total Balance of 2017.3 Unlisted Portfolio Investments subject to Reserve Reserve Reserve Reserve Total Reserve unlisted Reserve （ Acquisition cost） reserve requirement balance ratio ratio balance reserve ratio holdings after ratio Region Investment No. of Investment No. of ① ② balance ③ reserves ③ balance co's balance co's A B C C/B C/A D C+D (C+D)/A A-C-D Japan 28,051 120 4,827 28 3,189 66.1% 11.4% 1,017 4,206 15.0% 23,845 21.4% U.S. 10,307 31 2,369 8 1,789 75.5% 17.4% 409 2,198 21.3% 8,109 26.4% Asia 9,386 67 4,014 35 2,935 73.1% 31.3% 247 3,182 33.9% 6,204 33.8% Subtotal 47,744 218 11,210 71 7,913 70.6% 16.6% 1,673 9,586 20.1% 38,158 25.3% Other funds 1,874 28 1,400 20 731 52.2% 39.0% 34 765 40.8% 1,109 37.6% Total 49,618 246 12,610 91 8,644 68.5% 17.4% 1,707 10,351 20.9% 39,267 25.9% Reserve ratio fell as a result of significant increase in new investments Exchange rate End of March 2017 : US$1 = ¥112.19 Note: 1. Acquisition cost is the book value after impairment losses (the same applies hereinafter) 9 End of March 2018 : US$1 = ¥106.24 2. Overseas life science investments (carried out by the venture investment division in Japan) are included in Japan VC-Backed IPO & JAFCO-Backed IPO (VC stake of 10% or more) Bar graph (Co's) Left: VC-Backed IPO in Japan Right: Of which, JAFCO's portfolio (Co's) First price-based market cap. Less than \10B \10B-\30B \30B or more 40 35 36 4 30 8 28 3 22 15 21 1 13 7 20 17 4 17 17 15 15 2 13 1 3 9 3 1 5 2 5 5 10 2 17 17 18 6 14 4 9 5 12 13 1 12 3 9 9 1 3 6 4 0 3 3 2 12.03 13.03 14.03 15.03 16.03 17.03 18.03 All domestic IPOs 36 52 53 86 94 87 79 All JAFCO-Backed IPO 17 20 19 21 8 6 7 Total market value of VC/PE funds' holdings in IPOs (\billion) a 79.3 45.3 258.2 256.0 95.2 59.3 136.1 Market value of JAFCO's holdings in IPOs (\billion) b 5.4 10.5 70.3 49.5 8.3 6.5 23.3 JAFCO's share (market-value basis) b/a 7% 23% 27% 19% 9% 11% 17% Seeking large scale IPOs through highly selective, intensive investment Note: 1. Market values are rounded to the nearest decimal place 2. Table below includes VC holdings of less than 10%; buyouts are excluded from above market value 3.