Purpose of LP Investments in CVC

According to the results of the JAPAN CVC SURVEY 2023, it has become clear that efforts toward LP (Limited Partner) investments are progressing within Japan's CVCs. 65% of the CVCs surveyed have reported that they are engaging in LP investments.

Main Goals of Companies Engaging in LP Investments

The motivations for CVCs engaging in LP investments are outlined below as the four main reasons:

1. Expanding Networks
- Expanding networks for CVC activities and M&A (49 responses)
- Building a startup ecosystem (43 responses)

2. Acquiring Investment Opportunities
- Gaining investment pipeline (32 responses)
- Gaining know-how in actual investments and thematic analysis (29 responses)

3. Accumulating Knowledge
- Gaining know-how specific to regions (22 responses)
- Acquiring know-how in investment and thematic analysis

4. Other Motivations
- Invitation received by chance (18 responses)
- Acquiring investment performance (8 responses)

Distinctive Trends

It is noteworthy that cases aiming purely for investment returns are few. Many CVCs are utilizing LP investments for more strategic purposes, such as network building and participating in ecosystems.

Additionally, the presence of responses such as "received an invitation by chance" suggests that there are also cases where LP investment opportunities arise passively.

Summary

Although LP investments within Japan's CVCs are currently a limited endeavor, many of the companies implementing them are doing so with clear strategic intentions. Notably, there is a strong emphasis on long-term value creation, such as network building and ecosystem formation.

In the future, as CVC activities mature, it is likely that more companies will consider LP investments as a strategic investment approach. However, it will be important that these efforts are guided by clear strategic objectives, such as strengthening CVC activities and building ecosystems, rather than solely seeking investment returns.

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