Relationship with Society | Business activities taking society into consideration
Nomura Group will proactively address environmental and social challenges around the world through our core financial business. Demonstrating the collective power attained by combining the individual expertise of our divisions and companies, we provide financial services that meet the needs of society.
 Kushiro Kojinkai Neurological Hospital |
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As markets in the fields of health and nursing care are expected to grow in conjunction with the rapidly declining birthrate and aging of society, better quality services are being demanded. Strengthening of the management systems of medical institutions and nursing service providers has thus become an issue of grave importance from the perspective of realizing a sustainable society. Nomura Group will contribute toward realization of an affluent society by proposing sustainable investment-based financial models for businesses in these fields.
In view of this, we have provided the following kinds of advisory and arrangement services for financial solutions in the field of healthcare.
- Assistance with management improvement and formulation of the next interim management plan at Mie Prefectural Hospital Agency.
- Investment and arrangement of a liquidation and capital injection at Kushiro Kojinkai Memorial Neurological Hospital
With regard to assistance with management at Mie Prefectural Hospital Agency, Nomura Securities Co., Ltd. established a Public Sector Institutions Section within our Institutional Clients Consulting Department to address needs arising from local public entities ensconced in a rapidly changing environment, and has been providing consulting services on management analysis and future directions for local government hospitals through Nomura Healthcare Co., Ltd. (Nomura Healthcare). Accordingly, this section has been collaborating with our Tsu Branch Office to provide ongoing support for this client. Hereafter, this section will collaborate with branch offices responsible for local public entities nationwide to provide solutions for the various needs emerging from individual entities.
With regard to arrangement of a liquidation and capital injection for Kushiro Kojinkai Neurological Hospital, we procured funds for establishment of a new hospital using a liquidation provided by Nomura Healthcare. This was our first instance of working with a hospital in the Kushiro region. To procure these funds, Nomura Healthcare made the arrangements for the liquidation and Nomura Group provided the equity capital. Nomura Healthcare also provides liquidity-based financial solutions for a number of nursing facilities.
Nomura Group will continue to expand its nationwide network of Nomura Securities Co., Ltd. branch offices, and making full use of our know-how on capital procurement, securitization and privatization, we will proactively address the various needs of public and private medical institutions and nursing service providers. |
In August 2007, Nomura Group provided CrimsonPower Holdings Company, Inc. (hereinafter "CPHC, The Philippines"), a company established by Tokyo Electric Power Company (TEPCO) and Marubeni Corporation, with a mezzanine loan as partial financing for the acquisition of the Philippines' power generation plant from Mirant Corporation (an independent American power generation company).
This was the first contract handled by the Project Finance, a corporate area newly established in Tokyo and Hong Kong in 2007. This acquisition was designed to utilize the mechanisms of project finance, and the US$230 million mezzanine loan corresponded to the intermediary portion between the US$2.7 billion senior loan (syndicated loan provided by the Japan Bank for International Cooperation and commercial banks) and the equities (TEPCO and Marubeni).
Asia is experiencing remarkable economic development and the need for infrastructure improvement projects (electricity, resources, water and sewage systems, roads, transportation, ports and harbors, airports, communications, etc.) is expected to grow. While there was little activity in the region following the monetary crisis, similar technological innovations in finance are beginning to emerge in infrastructure improvement projects.
Nomura Group creates new investment opportunities for a broad range of investors through the use of capital markets by encouraging infrastructure improvement programs in the Asian region through new financing mechanisms that make risk-taking easier for project sponsors as well as providing or arranging liquidity-enhancing mezzanine loans, for example.
In the past, nursing care in Japan fell under the domain of the government. However, with Japan's declining birthrate and aging population, it has become necessary to apply market mechanisms and private sector ingenuity to raise the quality of nursing care services in a manner that the country's economy can sustain.
In light of this situation, Nomura Group has developed a new financial scheme for securitizing nursing homes. This is one more way that we can achieve our goal of creating an affluent society though investment; by providing sustainable financial models for the nursing care sector.
For obvious reasons, a nursing home cannot experience an operation stoppage. Under Nomura Group's securitization method, we partner with a professional nursing home management company, assuring that this professional management company will be on hand to take over as a "back-up operator" should problems arise with running the facility. This feature makes it easier for institutional investors to invest in securitized products backed by nursing home facilities. The new method was developed by Nomura Healthcare Co., Ltd., a Nomura Group company specializing in raising funds and consulting for healthcare and nursing care institutions.
Faced with these social trends and rapid advances in medical technologies, healthcare institutions are confronted with increased capital investment needs. These include new facilities for hospital wards and nursing care facilities, as well as building disease prevention and treatment facilities.
Meeting such funding demands for this new level of capital investment requires diversification of fundraising methods that go above and beyond indirect financing on which it has depended up until now. It is Nomura Group's aim to fulfill our social responsibilities as a financial services company by providing solutions and advice in response to newly arising needs, in addition to developing profitable businesses.
In December 2006, Nomura Group partnered with the Development Bank of Japan (DBJ) to create the Urban Renewal Private Fund, a real estate equity mezzanine fund. The 50 billion yen fund invests in the equity portion of real estate investment projects.
The Fund is operated by DBJ Nomura Investment Co., Ltd., a joint venture between Nomura Group and DBJ established in November 2006. This real estate investment company was established to respond to diverse needs for risk capital in urban renewal and other real estate projects, so as to contribute to the growth and increased sophistication of financing mechanisms in Japan.
This is not the first time the institutions have worked together. In a partnership that combined their respective strengths, Nomura Group and DBJ established the Urban Renewal Private Mezzanine Fund in May 2004, which has been a pioneer in the field of mezzanine financing for real estate projects. We will apply the knowledge we have gained in mezzanine finance through this Fund's activities to equity projects as well, to assist with the capital needs of property development projects, and to contribute to the revitalization of Japan's cities.
In line with DBJ's guidelines for investment and financing activities, the Urban Renewal Private Fund will invest in development projects and liquidity enhancing projects involving offices, commercial facilities, logistics facilities, and rental housing.
Nomura Global SRI 100 (popularly known as Nomura Global Social Responsibility Investment)
[Managed by: Nomura Asset Management Co., Ltd.]
The fund seeks to achieve investment gains (on a yen equivalent basis) from movements in the FTSE4Good Global 100 Index, an index comprising companies around the world that meet social responsibility standards.
Morningstar SRI Index Open (popularly known as Tsunagari)
[Managed by: Nomura Asset Management Co., Ltd.]
This fund seeks to achieve investment gains from movements in the Morningstar Socially Responsible Investment Stock Index, an SRI index targeting companies listed domestically that is the first of its kind in Japan.
Nomura Global SRI Index Fund DC (for DC pension plans)
[Managed by: Nomura Asset Management Co., Ltd.]
This fund, specifically for defined contribution pension plans, invests in the publicly-offered Nomura Global SRI 100 Fund and its mother fund.
