The market for listed infrastructure funds has been gaining attention, along with increasing interest in ESG investments.  Our firm was deeply involved in the development and design of this market in Japan, and we have now worked on a number of IPOs of infrastructure funds.  The infrastructure market was established on the Tokyo Stock Exchange on April 30, 2015, and the very first issue was listed on June 2, 2016.  There have been six other listings of infrastructure funds since then, but two were taken private, so there are five listed infrastructure funds as of May 1, 2023.  Our firm has worked on six out of those seven IPO transactions, and we provide ongoing legal advice to clients on fund operations.  MHM is unrivaled in Japan when it comes to advising on these funds.

The target investments of all currently listed infrastructure funds in Japan are renewable energy power plants, which are eligible as ESG investments.  Some listed infrastructure funds have issued units as green equity, offering investment opportunities for investors in ESG investments.  ESG investments have gained importance to financial institutions and institutional investors, and that importance is expected to continue to increase.  Against this background, the listed infrastructure market will likely continue to expand.

Investment units and other financial products that focus on infrastructure are listed on the infrastructure fund market, which is based on the REIT market system.  In practice, however, infrastructure funds for the most part differ from REITs in terms of investment characteristics and risk.  Also, infrastructure funds are more structured financial instruments.  Due to such differences, the structure of infrastructure funds itself varies from that of REITs, so there are quite a few practical matters to consider when forming and listing infrastructure funds.

At MHM, not only did we act as issuer counsel for the very first two inaugural infrastructure funds, but we continue to provide legal advice to several clients on the various types and inner workings of listed infrastructure funds.  We believe that MHM is the most accomplished and experienced firm in Japan when it comes to these funds.

We have grasped the latest information and trends through the tightly knit exchange of information and opinions with relevant agencies, organizations and market participants, and cultivated experience from client requests and consultations.  Taking advantage of such information and experience, we have the organization and systems in place to support the formation and listing of infrastructure funds by coordinating our lawyers in related fields, including the infrastructure/energy practice group which is well-versed in construction and operation of various infrastructure assets and power plants, along with their project financing, and the asset management, REIT and capital markets practice groups which are vastly experienced in formation and listing of J-REITs and other entities/funds.