Success Stories

Pinecone KK (July 2023)

(Left) Shusaku Hattori (Right) Andrew Chou Pinecone KK
General Partner

Interviewer: Financial Services Agency (April 2023)

Company Profile
Company: Pinecone KK
Established: November 2022
Main Business: Specially Permitted Business for Foreign Investors, etc.


1. Pinecone, became the first notifier for the new “Specially Permitted Business for Foreign Investors, etc. (SPBFI)”.

Congratulations on your completion of the new SPBFI notification. Could you give us an overview of your company?

Pinecone was established to invest in Small and Medium Enterprises (SMEs) in Japan.

Our way of investing in SMEs is quite different to the traditional private equity model which we felt was too aggressive and short-term focused for the Japanese SME market which typically meant a 3 to 5 years investment horizon before needing to re-sell the company for a profit.

We arrived at this model after searching across the world for a way that was more compatible with Japanese business norms and cultural values. Our search led us to an evergreen investment holding model applied by a group of highly successful companies known as the "Swedish Serial Acquirers".

We want to be the first to bring this model to Japan.

Can you provide some background on yourselves?

Andrew and Shu, the two General Partners of Pinecone, met socially a few years ago, and despite coming from very different professional backgrounds, they quickly bonded over a shared passion for investing and business. Towards the end of 2022, they joined forces upon identifying a fast growing demand among Japanese family-owned companies for business succession solutions.

Shu had personally experienced the difficulties of business succession in Japan when his family faced the unexpected forced generational transition of their auto dealership in Shizuoka. This informed him of the need for a better solution, and also presented an opportunity to leverage his business experience and operational skills.

Andrew’s professional background had been in asset management both internationally and here in Japan across both the private and public equity spaces.

Given Andrew was a professional investor himself, having focused on finding high quality Japanese companies over the past few years, he saw an opportunity to apply his experience in SME investing on a much larger scale within the Japanese SME landscape and this was the genesis of Pinecone.


2. All-in-English Registration Process through Financial Market Entry Office (FMEO) and the Financial Start-up Support Program

Pinecone became the 1st successful notifier of SPBFI by using the Financial Market Entry Office (FMEO). What was your impression about this new SPBFI notification? What were the challenges trying for a new notification system?

We were delighted to be the first company to successfully commence operation through the new pathway provided by the SPBFI notification process.

We felt the notification process strikes a good balance between upholding the integrity of the financial system while at the same time expediting the launch timeframe for a new firm like ours..

We were grateful for the guidance and support provided by the team at the Financial Market Entry Office. Throughout the process, they worked collaboratively with us to ensure that the expectations and goal posts were clear. We were pleasantly surprised to have consistently received detailed feedback within one to two days of each draft submission.

Pinecone was accepted to Financial Start-up Support Program by JFSA and Tricor Japan. What is your impression of using this program?

We felt privileged to have been accepted into the Financial Start-up Support Program. The support from JFSA and Tricor Japan ensured that distractions from the necessary but time-consuming business establishment tasks were kept to a minimum. Of course, there were always minor challenges, but they did not worry us as we knew that both the Financial Market Entry Office and Tricor Japan were behind us.

This allowed us to focus and direct our precious resources towards fulfilling our business objectives. As a result, we were able to accelerate our timeline by many months. The rebate of costs associated with the entry is also helpful for emerging investment managers like us.


3. Pinecone’s vision for the Future

What is Pinecone’s vision for the future?

Our vision is for Pinecone to be recognized as a pioneer on the Japanese investment landscape by bringing this evergreen investment holding model to the SME space in Japan.

We want to prove that a different investment approach is possible and in turn inspire others to follow in our footsteps.

Can you share your story about your company name?

We wanted a name that conveys our overarching investment philosophy which places an emphasis on long-term value creation. Pine trees have long been regarded in Japan as evergreen symbols of endurance and eternity.

Specifically, the function of a pinecone is to safeguard a pine tree's seeds from harsh weather conditions, wind, and animals. Once favorable conditions arise, pinecones release their seeds to enable them to grow and thrive. This Pinecone, accurately describes our attitude and approach towards our portfolio companies.

Shusaku Hattori
Pinecone KK
General Partner

Shu, a Japan native, has 15-plus years of experience in management consulting, turnarounds, venture-backed start-ups. He started his career as a financial journalist, then moved onto Taiwan, joined McKinsey & Co in Tokyo and Shanghai. He has been involved in strategy and hands-on transformation projects in the field of advanced technology in Asia, Europe, and the U.S. He also joined as an early employee and VP at Groupon (one of the fastest growing Unicorn status in Asia) and, most recently, a Director at US turnaround firm Alix Partners. He is also an internationally published author with McGraw Hill (”The Mckinsey Edge: Success Principles from the World's Most Powerful Consulting Firm”) and is fluent in Japanese, English and Chinese. Shu graduated from McGill University and received a full national scholarship from National Taiwan University for his MBA.

Andrew Chou
Pinecone KK
General Partner

Andrew, an Australian native and now permanent resident of Japan, has 20 years of experience across corporate strategy, investment banking, private and public equities funds management. Most recently, he established the Tokyo office of VGI Partners (US$2bn global equities fund) focusing predominantly on investments in Japanese companies. Prior to this, he led successful investments on behalf of an Australasian microcap private equity fund that delivered gross IRR of 32%. He began his career as an Engineer at Telstra (Australia’s largest telco) and then as an investment banking analyst at Greenhill (now part of Mizuho). Andrew graduated with first class honours in Computer and Biomedical Engineering from the University of NSW.