(Bloomberg) -- Japan’s low-budget animation films are becoming popular worldwide. Mizuho Securities Co. hopes to cash in on that by boosting financing for the sector.
The Tokyo-based brokerage is starting an investment fund for films by the end of this year. It will initially have around ¥1.5 billion ($9.5 million) to ¥2.5 billion to deploy in financing, and plans to invest about ¥800 million per movie.
For investors, the fund will offer an opportunity to park their money in a movie sector that’s created globally popular works such as Demon Slayer and Studio Ghibli films like Spirited Away. That would mark a change from the tendency in recent years for anime movies to be mainly funded by people involved in their production.
Mizuho’s move also comes as Japan’s pop culture starts to attract the attention of global investment firms. In May, Blackstone Inc. was picked as the buyer of manga company Infocom Corp., after outbidding rivals, according to people familiar with the matter.
Mizuho’s fund will seek financing from investors including financial institutions and companies, starting at about 50 million yen per unit, according to Shuichiro Tomihari, director at the firm’s global investment banking division. It will also consider asking overseas investors for cash.
“Japanese animation is attracting interest around the world,” said Tomihari. He said he spent about two years researching the industry and hopes to “create opportunities for third-party investment and accelerate the revitalization of the animation industry.”
Government Support
The government has also shown support for Japanese pop culture like animation. “Anime, manga, music and other artistic content are assets we ought to be proud of,” with overseas sales comparable in scale to exports of steel and semiconductors, according to a statement on Prime Minister Fumio Kishida’s “New Capitalism” proposals released in June.
“Budgets for Japanese animation movies are significantly lower than in the US, so I’m hoping additional funds from institutional investors will raise the standard of living of animators,” said Gaku Nakatani, who directed the animation “Forest of Piano” and previously worked at DreamWorks Animation in the US. “Japanese animation is certainly gaining popularity overseas, and demand will increase further in the future.”
The nation’s anime market has almost doubled in size to ¥2.93 trillion yen in the decade to 2022, according to data from industry group Association of Japanese Animations.
Financing movie-making isn’t without risks. Funds that are similar to Mizuho’s existed in the 2000s, but they didn’t take root because of their nascent structure. Fund holders may face losses if a movie is in the red.
Only 34 Japanese films, or 5% of those screened in 2023, earned more than ¥1 billion at the box office, according to the Motion Picture Producers Association of Japan. A film earning more than ¥3-4 billion is considered a hit and a film exceeding 10 billion yen is a big hit, according to Yasuki Yoshioka, an analyst at SMBC Nikko Securities Inc.
The fund will be developed jointly with Questry Co., a startup that develops securities using blockchain technology, and Royalty Bank, which engages in intermediary business for royalty transactions.
Workers at Japanese film production sites tend to have long working hours and low wages. Questry founder and chief executive officer Tomonobu Ibe, a former Goldman Sachs Group Inc. banker, said the influx of investor funds “will have a significant effect in terms of increasing the scale of production.” It would likely “create a good cycle” by improving compensation for workers and providing appropriate returns to investors that may be re-invested, he said.
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