Message from the CEO

I would like to thank all stakeholders for their loyal patronage.

Ten years following our entry into investment business, the time has come to make a structural switch

An economic environment conducive to traditional-style investment business is typically characterized by an annual growth rate of about 5%, an energetic IPO market and corporate growth directly reflected in share prices. Following the Lehman shock, however, the interminable downfall of finance capitalism precipitated by multiple crises mainly afflicting the economies of developed nations, the Eurozone sovereign debt crisis and the dismal state of the Japanese economy, has wielded a negative impact causing wild stock-market gyrations and the IPO market to shrink. It will require considerable time and major change before a solution can be found to the fiscal woes of Japan and other developed nations and Oak Capital has concluded that the prolonged negative impact on the financial market in the foreseeable future is signaling an end to traditional ways of engaging in investment business operations.

We are pursuing a structural switch in response to changes in our business environment; a shift from a conventional investment company to a "business strategist company"

For our core investment banking operations, we are mapping out new growth strategies while pursuing a major structural shift with the objective of discarding profit structures that are entirely dependent on capital gain.
As the first stage, Oak Capital will enter into the next-generation digital postal business which commercializes business models that take advantage of the growing smartphone market. This will be undertaken as a joint project with Hitachi Systems and existing portfolio companies engaged in cutting-edge information technologies and on-demand printing technologies. Henceforth, Oak Capital will develop and enhance similar approaches and make the shift from a company engaged in conventional investment activities to a "business strategist company," or more specifically, a company playing an initiative role in the creation and implementation of corporate growth strategies and in the building of new businesses. This structural switch will allow us to develop the business projects to be pursued under this new direction into a new revenue stream on top of continued value enhancement for our portfolio companies.

I take this opportunity to express my sincere gratitude to all of our stakeholders for their continuing support and encouragement as we stride ahead and embrace the challenge of corporate evolution.

(For reference)

Concerning the global trend of next-generation digital post

Next-generation "digital postal business" has already started to take root in developed countries such as the United States, Germany and England. Digital Post Co., Ltd., the company that was recently established, is embarking upon this new joint project together with IT companies Flight System Consulting, Inc. and Softfront, Inc., on-demand printing services provider Tokyo Lithmatic Corporation and Hitachi Systems, Ltd., a leading company in the Japanese information industry. Capitalizing on the widespread use of mobile terminal devises such as smartphones, the digital postal business will seek to become Japan's first provider of a full range of next-generation communication services. These services will include physical delivery of digitally-produced letters or original greeting cards with a gift (e-commerce) as well as DM forwarding and paperless communication utilizing innovative frontier technologies. As a next-generation means of communication, these digital postal services are expected to expand into a significant market and contribute to the business growth of each participating company.

November, 2011
Hiroyasu Takei
Representative Director, Chairman and CEO