New fund bets on ‘anime’ character

by Tomoko Yamazaki and Eijiro Ueno

Bloomberg

Music Securities Inc., a music production and fund management firm, will start a fund investing in products from the animated series “Ge Ge Ge no Kitaro” featuring a one-eyed demon boy who lives in a graveyard.

The Tokyo-based firm plans to raise ¥10 million to ¥30 million for the Yokai Fund, named after the Japanese word for demon, said Masami Komatsu, chief executive officer of Music Securities in Tokyo.

Komatsu is raising money from individuals via the Internet to finance merchandise including cups, fans and ties based on Kitaro characters created by writer and illustrator Shigeru Mizuki.

Founded by Komatsu in 2001, Music Securities has set up about 65 funds raising about ¥500 million through the Internet to invest in artists, sake brewers and microfinance in Cambodia. The firm is tapping the interests of individual investors and betting on small companies and individuals with business plans that banks may be reluctant to fund.

“It’s becoming harder to preserve what’s left of culture and regionalism of Japan nowadays and we wanted to somehow help those who are struggling to maintain that tradition,” Komatsu, 34, said in an interview Monday. “We wanted to offer a place where individuals can invest in not just financial securities, but businesses that are in need of capital but can’t get it from financial institutions.”

Banks are less likely to back such ventures after costs for bad loans more than tripled at Japan’s three largest banks and doubled at smaller regional institutions last fiscal year. Lending growth slowed in August for an eighth straight month.

Characters like Kitaro, who fights for peace between people and demons, are household names in Japan and are gaining popularity worldwide in “manga” and “anime” animation.

The government is promoting the nation’s manga and anime creators abroad in its Cool Japan campaign.

“The fund could potentially attract overseas capital, given that Japanese animation has been highly regarded abroad,” said Haruhiro Nakano, president of Saison Asset Management in Tokyo. “It goes against the whole idea of funds just chasing after money, but rather the proceeds will go to revitalizing a region, so I’m going to be watching closely to see whether it will succeed.”

Individuals invest in Music Securities funds through its Web site, with minimum investments ranging from ¥5,000 to ¥10,000, according to Komatsu.

For the Yokai fund, which is pending approval from the Financial Services Agency, Music Securities will use the money to team up with design and manufacturing companies to produce merchandise in manga artist Mizuki’s home city of Sakaiminato, a town of about 36,000 people, in Tottori Prefecture.

While Komatsu declined to specify arrangements for the Yokai fund, Music Securities investors typically get about 40 percent to 50 percent of the sales of whatever the fund invests in, be it compact discs, sake or jeans, he said. Music Securities takes a 5 percent fee from the total money that is raised, and once the sales figure surpasses the break-even point, it gets 10 percent to 20 percent of further sales.

“There are financial returns and social returns that individuals can obtain and we make it clear to the investors that people shouldn’t invest simply chasing financial returns,” Komatsu said. “There are many cities in Japan that don’t have enough government funding to revitalize their own areas and we want to provide alternative means to do that.”