Daiwa Securities Group Annual Report 2012 Investment Division Action Plan for FY2012 Investing in the Future Through Private Equity Stakes Daiwa Corporate Investment Co., Ltd. Developing Solutions Through Investment Activities Daiwa PI Partners Co. Ltd. <Venture Capital Investment > <Monetary Claims Investment> <Private Equity Investment> <Buy-Out Investment> <Investment Funds> 29 * MBO: Management Buyout—The act in which management leads the buyout of  a company’s own shares. This business focuses on business reorganization and reformation  of medium-sized businesses with valuable management assets,  often through MBO*. Investment focuses on companies with no  clear management succession, the subsidiaries of large corpora- tions, business divisions that are being spun off, or companies  which aspire to become privately-held. The experience and know- how cultivated at Daiwa Corporate Investment through venture  investment is leveraged in directly assisting the buy-out investment  of target companies. The Group has established Daiwa Quantum Capital Partners I—an  investment fund operated jointly with Quantum Leaps Corporation,  the venture capital firm founded by former Sony CEO, Mr. Nobuyuki  Idei. This fund invests mainly in growing companies in Asia,  including Japan. The Group has made more than ¥300 billion in private equity  investments in over 20 Japanese and Asian companies. Daiwa Corporate Investment generally provides support to compa- nies with advanced technologies and companies with unique busi- ness models, content or services. Its approach is to offer venture  companies a “Hands-On” support package that includes not only  investment capital but also contacts to prospective executives or  employees, advice on listing the company’s shares, and a full array  of other types of management assistance. The Daiwa Securities Group has been a pioneer in monetary claims  investments since 1998. It acquires loan contracts and nonper- forming loans from financial institutions and business corporations  throughout Japan. In FY2011, Daiwa PI Partners established Aozora Daiwa Finance  Co., Ltd. together with Aozora Bank, Ltd. in October 2011. Through  this joint venture, Daiwa PI Partners will build a one-stop framework  for a wide range of high-value-added services providing fund raising  solutions in bridge loans and mezzanine finance for M&A transactions,  which require both speediness and specialized expertise. In FY2011, Daiwa Corporate Investment established the East  Japan Earthquake Small and Medium Enterprises Revival Support  Investment Limited Partnership, with the aim of providing assis- tance for recovery and growth from the East Japan Earthquake.  This fund aims to contribute to the early recovery and sustained  growth of the disaster-stricken region by flexibly providing risk  money (equity investment) to the region’s unlisted companies. Daiwa Corporate Investment Co., Ltd. was established in 1982 as  a private equity firm. The company uses its extensive business  network, centered on the Daiwa Securities Group, and a wealth of  accumulated experience and knowhow to supply capital for venture  companies or buy-outs. In this way, it has helped numerous busi- nesses to grow and eventually to list their shares publicly. In the  fund management business, which supplies capital for investments,  the company also operates a highly transparent financial instruments  operation (Type II Financial Instruments Business and Investment  Management Business). Daiwa PI Partners Co. Ltd. was launched in 2001, under the  name Daiwa Securities SMBC Principal Investments Co. Ltd.  The company was involved in private equity investment, monetary  claims investment, real estate investment, investment in green- house gas emissions credits and regional recovery funds. In February  2010, the investment portfolio was transferred to a company that  retained the original name, Daiwa Securities SMBC Principal  Investments Co. Ltd., whereas the current company adopted the  name Daiwa PI Partners Co. Ltd., and began pursuing new invest- ment activities. Through its investment activities, Daiwa PI Partners  addresses the varying needs of target companies for raising capital  and selling off assets. The Daiwa Securities Group is active in investment businesses, including venture capital investments, private equity investments  and fund management. These businesses not only offer a supply of capital to meet the funding needs of customers, but they  also enhance their corporate value through “Hands-On Management.” 1. Maximize returns from the existing portfolio 2. Invest and raise funds in a timely and appropriate manner