Infrastructure Funds

Growing interest in ESG investment has fueled increased focus on the market for listed infrastructure funds in Japan. Our firm played a pivotal part in designing this market before its establishment in 2015 and has since maintained a close connection through, for example, our involvement in myriad IPO cases. The Tokyo Stock Exchange opened the market for infrastructure funds in 2015, and the first fund was listed in 2016. Several funds have followed, bringing the total to seven, with five remaining after the delisting of two as of May 2023. Our firm has been instrumental in the IPOs for six of the seven listed funds, including the very first one, showcasing our prominent role in this market. We also provide comprehensive legal advice to numerous clients on listed infrastructure funds, boasting an unsurpassed track record and wealth of experience in Japan.

All listed infrastructure funds in Japan invest in renewable energy facilities, originally focusing on solar power but now also including wind power. These funds qualify as ESG investment targets and often raise capital through “green equity” investment units, appealing to ESG-focused investors. ESG investment has become crucial for financial institutions and institutional investors, and its importance is expected to grow, driving further expansion of the infrastructure funds market.

The market for infrastructure funds, which lists investment securities targeting infrastructure, is fundamentally based on the Japanese REIT market system. However, infrastructure funds differ from REITs in their investment targets, risks and their more complex financial structures. Accordingly, setting up and listing an infrastructure fund involves addressing numerous practical considerations.

Mori Hamada stays current with the latest information and trends in practice through active dialogue with relevant organizations and market participants. We have built in-house a collaborative framework that enables us to provide one-stop support for the formation and listing of listed infrastructure funds. This framework combines the talents of lawyers in our Energy & Infrastructure Practice, which is well-versed in the construction and operation of various types of infrastructure and power plants and associated project financing, with our Asset Management, REIT and Capital Markets Practices, all of which boast formidable experience in fund formation and listing.