Integral Corporation

Business Details

The company organizes and manages PE investment funds targeting listed and unlisted companies in Japan. As a GP, it receives management fees and, through resident hands-on Management Support (i-Engine) provided to portfolio companies, aims to enhance corporate value, generating capital gains and Carried Interest from exits such as IPOs and trade sales. Hybrid investment combining Principal Investment with the company's own capital is a key differentiating factor. The main operating subsidiary is Integral Partners Co., Ltd.

Recent Overview

Recorded ¥8,927 million in Carried Interest upon realization of an exit in the Fund No.3 series, driving a sharp expansion in quarterly revenue

In Q1 FY2026 (ending December 2026) (January to March), the Fund No.3 series transferred all shares held in M&I Co., Ltd. (formerly Mamezou K2 Top Holdings Co., Ltd.) and sold a portion of its shares in Toyo Engineering Corporation, recognizing ¥8,927 million in Carried Interest. In addition, the sale of MUTOH Holdings Co., Ltd., a portfolio company of the Fund No.4 series, was completed through a tender offer. Meanwhile, the Fund No.5 series made a new capital investment in Yashima Proceed Co., Ltd., a specialized manufacturer of high-performance resin processing. Overall, the fair value of both listed and unlisted portfolio companies decreased, resulting in a total investment loss of ¥248 million. From March 2026 onward, the Fund No.3 series completed the sale of all remaining shares held in Toyo Engineering Corporation and plans to receive additional Carried Interest.

Key Products

Growth Drivers

• Management fees from the Fund No.5 series (currently in its investment period) began to be recorded in full from January 2025, increasing management fees received year on year (¥7,553 million for full-year FY2025 (ending December 2025); projected at ¥7,579 million for FY2026 (ending December 2026))
• Realization of Carried Interest through progress in exit activities of the Fund No.3 and No.4 series (¥8,927 million recorded in Q1 FY2026, ending December 2026)
• Enhancement of portfolio company business value, including the expansion of the animal hospital group (47 facilities across 15 prefectures) by Japan Animal Care Holdings and MiraiVets Partners Co., Ltd., portfolio companies of the Fund No.4 series
• Stabilization of the Group's overall AUM base following the completion of the final closing of Real Estate Fund No.1 (May 2026, total committed capital of ¥23.5 billion)
• Diversification of future revenue sources through new investments in the Global Tech Growth Investment Business (PixAI, Omio, etc.)

Risks

• Carried Interest depends on the timing of exits at portfolio companies, resulting in extremely large quarter-to-quarter and year-to-year revenue volatility (from ¥24 million in Q1 FY2025, ending December 2025, to ¥8,927 million in Q1 FY2026, ending December 2026)
• Risk that total investment gains decrease due to share price fluctuations at listed portfolio companies and deterioration in interest rates and comparable listed company metrics used in fair value valuation of unlisted portfolio companies (a loss of ¥248 million was recorded in the current quarter)
• Risk that fair value valuation of portfolio companies, which involves significant estimation under IFRS, results in large swings in valuation gains/losses due to fluctuations in equity markets and interest rate environments
• Risk that new investments concentrated in the Fund No.5 series, following the completion of the investment period for the Fund No.4 series, could be hindered by failed fundraising or a lack of investment opportunities, impeding AUM growth
• Risk that the effective tax rate rises due to the introduction of the special defense corporate tax from April 2026 onward, pressuring after-tax profit
• Risk of a decline in Fee-Earning AUM, the basis for calculating management fees, given the decrease in AUM and fair value of fund investments compared to end-December 2025 (AUM: ¥576.5 billion to ¥510.3 billion; fair value of fund investments: ¥360.9 billion to ¥315.6 billion)